Is Alphatec Stock a Buy or Sell After Insider Selling?

The recent wave of insider selling at Alphatec Holdings, Inc. (ATEC) has sparked debate among investors. Executives, directors, and major shareholders have offloaded millions of dollars in shares during Q4 2025, raising questions about the company's future prospects. However, when viewed alongside Alphatec's robust financial performance and aggressive revenue growth, the picture becomes more nuanced. This analysis evaluates whether the insider selling is a red flag or a sign of profit-taking amid a high-growth story.

Insider Selling: A Closer Look

Alphatec's insider transactions in Q4 2025 were both frequent and substantial. For instance, Craig E. Hunsaker, an executive vice president, sold 679,051 shares at $20.84 per share on December 10, 2025, while David R. Pelizzon, a director and 10%+ shareholder, unloaded 4,915,000 shares at $19.66 per share on December 16, 2025. Similarly, CEO Miles Patrick S sold 2,211,000 shares at $22.11 per share on December 1, 2025 according to reports. These transactions occurred against a backdrop of a stock that had surged 118% year-to-date as of October 31, 2025.

Such selling is not isolated to Q4. Earlier in 2025, COO Scott Lish sold 6,323 shares at $16.01 per share on August 21 and 16,666 shares at $15.00 per share on August 5 according to financial results. The pattern suggests a mix of strategic profit-taking and liquidity needs, particularly for executives with large shareholdings. However, the sheer volume of sales-especially by major shareholders like Squadron Capital, which sold 5,295,098 shares in December-has prompted skepticism.

Financial Performance: Growth Outpaces Profitability

Despite the insider selling, Alphatec's financials tell a story of rapid expansion. Q3 2025 revenue hit $196.5 million, a 30.4% year-over-year increase, with surgical revenue (90% of total revenue) growing 31% to $177 million. The company raised its full-year 2025 revenue guidance to $760 million, reflecting 24% growth compared to 2024.

However, profitability remains a challenge. Alphatec reported a net loss of $52 million in Q1 2025, driven by operating expenses of $160 million that outpaced gross profit of $116 million according to financial data. While the company expects to achieve positive free cash flow in 2025 and has posted non-GAAP net income in recent quarters, its reliance on reinvestment in R&D and market expansion means margins remain under pressure.

Valuation: High Multiples, High Expectations

Alphatec's market valuation has ballooned to a $3.09 billion market cap as of Q4 2025, supported by a forward P/E ratio of 172.41 and a P/B ratio of 258.34 according to key statistics. These metrics suggest investors are pricing in aggressive future earnings growth, though they also highlight the stock's vulnerability to earnings shortfalls. The company's gross margin of 70% in Q3 2025 -far above the industry average of 12.1%-provides some justification for the premium, but it remains to be seen whether this margin can sustain the high valuation.

Weighing the Evidence

The insider selling at Alphatec is undeniably significant, but it must be contextualized. For executives like Hunsaker and Lish, selling shares after a 118% stock price surge is a rational move to lock in gains. Similarly, major shareholders like Squadron Capital and Pelizzon may be diversifying their portfolios after a strong year. However, the timing of some sales-particularly those in December-coincides with a stock price peak, raising questions about whether insiders are signaling overvaluation.

On the other hand, Alphatec's financial trajectory is compelling. Its revenue growth, surgical innovation, and improving operational leverage suggest a company on the cusp of profitability. Analysts remain bullish, with 10 of 11 covering firms assigning a "Buy" rating and an average price target of $23. The key risk lies in the valuation: if growth slows or margins compress, the stock could face downward pressure.

Conclusion: A Buy with Caution

Alphatec's insider selling is not a definitive sell signal but rather a reminder of the risks inherent in high-growth, high-valuation stocks. For investors willing to tolerate volatility, the company's strong revenue growth and market leadership in spinal procedures make it an attractive long-term play. However, the elevated P/E and P/B ratios mean the stock has little margin for error. A balanced approach-buying in smaller positions and monitoring earnings execution-may be prudent.