Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors

Are you an investor keeping a close watch on Alta Equipment Group Inc. (ALTG)? Understanding a company's financial health is crucial for making informed decisions. Despite market headwinds, Alta Equipment Group's total revenues remained nearly flat at $1.87 billion in 2024. But with a net loss of $(65.1) million compared to a $5.9 million profit in 2023, what does this mean for the company's financial trajectory? Dive in to explore key insights into ALTG's performance, segment results, and future outlook.

Alta Equipment Group Inc. (ALTG) Revenue Analysis

Understanding the revenue streams of Alta Equipment Group Inc. (ALTG) is crucial for investors seeking to assess the company's financial health and stability. A detailed analysis of revenue sources, growth rates, and segment contributions provides valuable insights into ALTG's performance and future prospects. You might also be interested in: Mission Statement, Vision, & Core Values of Alta Equipment Group Inc. (ALTG).

For the full year 2024, ALTG reported total revenues of $1,876.6 million. While this figure is only a slight decrease of $0.2 million compared to the previous year, a deeper dive into the various revenue streams reveals important trends and segment performances.

Here’s a breakdown of ALTG’s primary revenue sources for the full year 2024:

• Construction and Material Handling: $1,131.4 million and $687.4 million, respectively.
• Master Distribution: $59.2 million.
• Product Support (Parts and Service): $294.4 million and $253.8 million, respectively.
• New and Used Equipment Sales: $987.0 million.

A closer look at the year-over-year revenue growth rates and segment contributions reveals the following:

Total revenue remained essentially flat, with a decrease of approximately 0.01%. This is how the revenue changed over the past few years:

The details regarding specific segment contributions are:

• Construction Equipment: Revenues were $1,131.4 million.
• Material Handling: Revenues reached $687.4 million, showing slight increase from the previous year.
• Master Distribution: Contributed $59.2 million.
• Product Support: Increased by 5.5% year-over-year, with parts sales at $294.4 million and service revenues at $253.8 million.

There were some changes in revenue streams in 2024. New and used equipment sales saw a decrease of 3.8%, totaling $987.0 million. This decline can be attributed to several factors, including elevated interest rates and uncertainty in the construction market. Despite these challenges, the product support business demonstrated resilience, achieving organic growth for the fifth consecutive year. The resilience of the dealership model and diversified revenue streams helped to offset some of the negative impacts from the contraction in the construction equipment market.

Alta Equipment Group Inc. (ALTG) Profitability Metrics

Analyzing Alta Equipment Group Inc.'s profitability involves looking at several key metrics that reveal how efficiently the company generates profit from its revenue. These metrics include gross profit, operating profit, and net profit margins, each providing a different perspective on the company's financial health.

Here's an overview of what to consider when evaluating Alta Equipment Group Inc.'s profitability:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after subtracting the cost of goods sold (COGS). It reflects the company's efficiency in managing production costs.
• Operating Profit Margin: This margin shows the percentage of revenue remaining after deducting both COGS and operating expenses. It reflects the company's efficiency in managing both production and operating costs.
• Net Profit Margin: This is the percentage of revenue that remains as net income after all expenses, including interest and taxes, are deducted. It represents the overall profitability of the company.

To gain a comprehensive understanding, it's important to examine these profitability ratios over several periods to identify trends. Additionally, comparing these ratios with industry averages provides insights into how well Alta Equipment Group Inc. is performing relative to its competitors. Efficient cost management and favorable gross margin trends are indicators of strong operational efficiency.

For more detailed information, you might find this resource helpful: Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors

Alta Equipment Group Inc. (ALTG) Debt vs. Equity Structure

Understanding how Alta Equipment Group Inc. (ALTG) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, debt-to-equity ratio, and its approach to balancing debt and equity financing.

As of the fiscal year 2024, a comprehensive overview of ALTG's debt levels is essential. This includes both long-term and short-term debt obligations. While specific figures for 2024 are not available, examining the trends from previous years can provide insights. For instance, analyzing the 2023 annual report would show the outstanding amounts of long-term loans, bonds, and any short-term borrowings used to fund working capital or acquisitions.

The debt-to-equity ratio is a key metric for assessing ALTG's financial leverage. Here's how it typically works:

• Calculate Total Debt: Add up all short-term and long-term debt.
• Determine Shareholder Equity: Find the total shareholder equity on the balance sheet.
• Divide Debt by Equity: Divide the total debt by the total shareholder equity to get the debt-to-equity ratio.

A high ratio indicates that the company relies more on debt, which can increase financial risk. A lower ratio suggests a greater reliance on equity, which is generally considered less risky. Comparing ALTG's debt-to-equity ratio to industry standards provides context. If the company's ratio is significantly higher than its peers, it may signal higher financial risk. Conversely, a lower ratio might indicate a more conservative approach to financing.

Recent activities such as debt issuances, credit ratings, or refinancing play a significant role in understanding ALTG's financial strategy. For example, if ALTG recently issued new bonds, it could indicate they are raising capital for expansion or acquisitions. Credit ratings from agencies like Standard & Poor's or Moody's provide an independent assessment of ALTG's creditworthiness. Upgrades or downgrades in these ratings can affect the company's borrowing costs and investor confidence. Refinancing activities, where ALTG replaces existing debt with new debt, can also impact its financial health by altering interest rates and repayment schedules.

Balancing debt financing and equity funding is a strategic decision for ALTG. Debt financing can provide capital without diluting ownership, but it comes with the obligation to make regular interest payments and repay the principal. Equity funding, on the other hand, does not require repayment but dilutes existing shareholders' ownership. The optimal balance depends on ALTG's growth strategy, market conditions, and risk tolerance. Companies might lean towards debt when interest rates are low and they have strong cash flows to cover payments. Equity might be favored when the company wants to reduce its debt burden or fund high-risk, high-reward projects.

For further insights into ALTG's investor profile, you might find this resource helpful: Exploring Alta Equipment Group Inc. (ALTG) Investor Profile: Who’s Buying and Why?

Alta Equipment Group Inc. (ALTG) Liquidity and Solvency

Analyzing Alta Equipment Group Inc.'s liquidity involves examining key financial ratios and cash flow trends to understand its ability to meet short-term obligations. These metrics provide insights into the company's financial health and its capacity to manage working capital effectively. Let's delve into the specifics.

Liquidity Ratios:

The current and quick ratios are fundamental indicators of a company's liquidity position. As of the fiscal year 2024, these ratios offer a snapshot of Alta Equipment Group Inc.'s capacity to cover its short-term liabilities with its current assets.

• Current Ratio: This ratio measures a company's ability to pay its short-term obligations with its current assets. For Alta Equipment Group Inc., the current ratio in 2024 stands at 1.53. This indicates that the company has $1.53 of current assets for every $1 of current liabilities.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more conservative measure of liquidity as it excludes inventories from current assets. The quick ratio for Alta Equipment Group Inc. in 2024 is 0.77. This suggests that the company has $0.77 of liquid assets (excluding inventory) available to cover each $1 of current liabilities.

Working Capital Trends:

Analyzing the trends in working capital provides a deeper understanding of Alta Equipment Group Inc.'s operational efficiency and short-term financial management. Working capital, calculated as current assets minus current liabilities, reflects the company's ability to finance its immediate operations. The working capital of Alta Equipment Group Inc. in 2024 is $299.1 million, compared to $233.5 million in 2023. The increase in working capital can be attributed to effective management of current assets and liabilities, ensuring smooth operational flow and financial stability.

Cash Flow Statements Overview:

Cash flow statements are essential for evaluating a company's financial health. These statements are divided into three main categories:

• Operating Cash Flow: This indicates the cash generated from the company's core business activities. For Alta Equipment Group Inc., the operating cash flow in 2024 is $118.7 million. This positive figure indicates that the company's primary operations are generating sufficient cash to sustain and grow the business.
• Investing Cash Flow: This section reflects cash used for investments in assets, such as property, plant, and equipment (PP&E). Alta Equipment Group Inc.'s investing cash flow in 2024 is -$60.3 million. This outflow suggests that the company is investing in its infrastructure and long-term growth.
• Financing Cash Flow: This involves cash flow related to debt, equity, and dividends. In 2024, Alta Equipment Group Inc.'s financing cash flow is -$75.8 million. This negative cash flow indicates that the company is likely paying down debt, repurchasing shares, or distributing dividends, which are all activities that consume cash.

Here’s a summary of Alta Equipment Group Inc.'s cash flow activities in 2024:

Potential Liquidity Concerns or Strengths:

Based on the data, Alta Equipment Group Inc. exhibits several liquidity strengths:

• Healthy Current Ratio: A current ratio of 1.53 suggests a strong ability to meet short-term obligations.
• Positive Operating Cash Flow: The $118.7 million in operating cash flow indicates that the company is generating cash effectively from its core operations.
• Increase in Working Capital: An increase in working capital from $233.5 million in 2023 to $299.1 million in 2024 demonstrates improved short-term financial management.

However, there are also potential concerns:

• Moderate Quick Ratio: A quick ratio of 0.77, while not alarming, suggests that the company's immediate liquidity (excluding inventory) is relatively tight.
• Negative Financing Cash Flow: While often a sign of returning value to shareholders or reducing debt, a sustained negative financing cash flow needs to be managed carefully to ensure it does not strain liquidity.

For further insights into the company's strategic direction, refer to Mission Statement, Vision, & Core Values of Alta Equipment Group Inc. (ALTG).

Alta Equipment Group Inc. (ALTG) Valuation Analysis

Assessing whether Alta Equipment Group Inc. (ALTG) is overvalued or undervalued requires a multifaceted approach, incorporating various financial ratios, stock performance analysis, and analyst opinions. Below is a breakdown of key valuation metrics to provide a comprehensive overview.

Key Valuation Ratios

• Price-to-Earnings (P/E) Ratio: As of December 31, 2024, the trailing P/E ratio for ALTG is 69.50. However, the forward P/E ratio is significantly higher at 222.22, suggesting potential earnings challenges in the near term.
• Price-to-Book (P/B) Ratio: The P/B ratio as of December 31, 2024, is 1.78. This ratio compares the company's market capitalization to its book value, providing insight into whether the stock is trading at a premium or discount to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio, a key metric for valuation, stood at 8.24 as of December 31, 2024. This ratio assesses the company's total value (including debt) relative to its earnings before interest, taxes, depreciation, and amortization, offering a clearer picture of operational profitability. As of April 18, 2025, the EV/EBITDA ratio is 7.25.

Stock Price Trends

Analyzing Alta Equipment Group Inc.'s (ALTG) stock price over the past year reveals significant volatility. As of April 17, 2025, the stock price is $4.19. The 52-week high is $12.09, while the 52-week low is $3.54, indicating substantial price fluctuation. Over the past year, the stock has fallen approximately 69%.

Recent stock performance:

• April 17, 2025: $4.19
• April 8, 2025: $3.95
• March 7, 2025: $4.80
• February 6, 2025: $5.70

Dividend Information

Alta Equipment Group Inc. (ALTG) does pay dividends. The current dividend yield as of December 24, 2024, is 3.43%, with a trailing twelve-month (TTM) dividend payout of $0.23. The dividend payout ratio for December 2024 was 0.00.

Analyst Consensus

The consensus among analysts is that Alta Equipment Group Inc. (ALTG) is a 'Moderate Buy'. The average 12-month price target from analysts is $12.63. Price targets range from a low of $8.50 to a high of $20.00. Recent analyst ratings include:

• Raymond James: Hold rating with a price target of $8.50 (March 10, 2025)
• DA Davidson: Buy rating with a price target of $11.00

These ratings suggest that analysts anticipate the stock to outperform the market over the next twelve months, despite recent challenges and volatility.

For further insights into the investors of Alta Equipment Group Inc. (ALTG), consider exploring: Exploring Alta Equipment Group Inc. (ALTG) Investor Profile: Who’s Buying and Why?

Alta Equipment Group Inc. (ALTG) Risk Factors

Several internal and external factors can significantly impact Alta Equipment Group Inc.'s financial health. These risks span industry competition, regulatory changes, and overall market conditions. Recent reports and filings highlight specific operational, financial, and strategic risks that warrant careful consideration.

Here's an overview of key risks facing Alta Equipment Group Inc.:

• Industry Competition: The equipment distribution and rental industry is highly competitive. Increased competition could lead to pricing pressures, reduced market share, and decreased profitability for Alta Equipment Group Inc.
• Regulatory Changes: Changes in environmental regulations, safety standards, or trade policies could increase compliance costs and impact the company's operations. For example, stricter emission standards for equipment could necessitate significant investments in newer, compliant machinery.
• Market Conditions: Economic downturns or fluctuations in key end markets (e.g., construction, infrastructure, industrial) can reduce demand for equipment sales and rentals, negatively affecting revenue and earnings.
• Operational Risks:
  • Supply Chain Disruptions: Disruptions in the supply chain, whether due to geopolitical events, natural disasters, or other factors, can lead to delays in receiving equipment and parts, impacting sales and service operations.
  • Integration Risks: As Alta Equipment Group Inc. continues to grow through acquisitions, integrating acquired businesses and achieving expected synergies poses a risk. Failure to effectively integrate these businesses could lead to increased costs and lower profitability.
• Financial Risks:
  • Debt Levels: Maintaining a high level of debt could increase the company's vulnerability to economic downturns and limit its financial flexibility. Rising interest rates could also increase debt servicing costs.
  • Interest Rate Risk: Fluctuations in interest rates can affect the profitability of floor plan financing arrangements.
• Strategic Risks:
  • Reliance on Key Suppliers: The company's dependence on a limited number of key equipment suppliers could pose a risk if those suppliers face financial difficulties or alter their relationships with Alta Equipment Group Inc.
  • Labor Relations: Work stoppages or other labor-related issues could disrupt operations and negatively impact financial performance.

Mitigation strategies and plans are crucial for addressing these risks. While specific details may vary, common strategies include:

• Diversification: Diversifying product and service offerings, as well as end markets, can reduce the company's reliance on any single area.
• Strategic Sourcing: Developing strong relationships with multiple suppliers can mitigate supply chain risks.
• Operational Efficiencies: Implementing operational improvements and cost-control measures can enhance profitability and financial stability.
• Compliance Programs: Maintaining robust compliance programs can ensure adherence to regulatory requirements and minimize legal risks.
• Financial Management: Prudent financial management, including managing debt levels and hedging against interest rate fluctuations, can mitigate financial risks.

Investors should carefully consider these risk factors and the company's mitigation strategies when evaluating Alta Equipment Group Inc.'s financial health and investment potential.

More insights about the company are available here: Mission Statement, Vision, & Core Values of Alta Equipment Group Inc. (ALTG).

Alta Equipment Group Inc. (ALTG) Growth Opportunities

Alta Equipment Group Inc. (ALTG) possesses several key growth drivers that underpin its future prospects. These include strategic product innovations, well-planned market expansions, and synergistic acquisitions that enhance its market position and service offerings.

Future revenue growth projections and earnings estimates suggest a positive trajectory, supported by the company's strategic initiatives and partnerships designed to foster expansion. These collaborations and internal developments are anticipated to drive revenue and improve profitability.

Strategic initiatives and partnerships expected to drive future growth:

• Expansion in high-growth markets: Targeting regions with increasing demand for equipment and services.
• Technological integration: Implementing advanced technologies to improve service delivery and operational efficiency.
• Strategic alliances: Forming partnerships to broaden product offerings and market reach.

Alta Equipment Group Inc. (ALTG) benefits from several competitive advantages that position it favorably for future growth:

• Strong market presence: Established reputation and customer base in key regions.
• Diverse product portfolio: Wide range of equipment and service offerings, reducing dependence on single product lines.
• Experienced management team: Leadership with a proven track record of driving growth and profitability.

These elements collectively create a foundation for sustained growth and enhanced shareholder value. For an in-depth look at the company's financial health, see: Breaking Down Alta Equipment Group Inc. (ALTG) Financial Health: Key Insights for Investors