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Home » Alta Equipment Group Inc. (ALTG): Equity Analysis

Alta Equipment Group Inc. (ALTG): Equity Analysis

What is Alta Equipment Group Inc.?

Country & Stock exchangeUnited States/New York Stock Exchange (NYSE)
Ticker symbol & Stock typeALTG, ALTG PRA/Both common and preferred stock
Industry Areas of operationRental & Leasing Services/USA and Canada
Business model & Business Merchandise Categorydealership/parts and specialized equipment
SeasonalityYes
BrandsAlta
Number of stores & E-commerce platforms85[1]/www.altg.com
CompetitorsDXP Enterprises (DXPE), MRC Global (MRC), Global Industrial (GIC), Northwest Pipe (NWPX), CompX International (CIX), Hudson Technologies (HDSN), Park-Ohio (PKOH), Manitowoc (MTW), GrafTech International (EAF), and Graham (GHM)[2]
Alta Equipment Group Inc. sales come from five sources: new and used equipment sales, parts sales, service revenues, rental revenues, and rental equipment sales. 

Equipment includes lift trucks and other material handling equipment, heavy and compact earthmoving equipment, crushing and screening equipment, environmental processing equipment, cranes and aerial work platforms, paving and asphalt equipment, other construction equipment, and allied products. Equipment maintenance and repair are among the services provided.

How did Alta Equipment Group Inc. perform over the past 5 years?

Below is the data accumulated over the past five years in the form of bar charts, divided into three main sections: the income statement, balance sheet, and cash flow statement, each of which has subsections with related KPIs.

How do I interpret the financial performance of Alta Equipment Group Inc. for the past 5 years?

Revenueis constantly increasing
Gross Profit Marginhigher than 20%, but lower than the desired 40%
Depreciation as % of gross profitmuch higher than the desired 6–8%, but at least it’s decreasing over time
Operating Ratiois staying on the same level
Interest Expense as % of operating incomemuch higher than the desired 6–7%
Operating Marginhas started to increase in recent years
Net Marginfar below the desired 20%
EPSshows a consistent upward trend
Cash and cash equivalentsamounts are low and most likely gained through borrowing money
Inventoriesare constantly rising in correlation with revenue, and they also correlate with net income, which is also somewhat on the rise from being negative to slightly positive
Short-term & long-term debttransitioned to mainly using long-term debt over short-term debt, which makes the company more stable in case of an emergency
Current ratiorecently higher than 1, which also adds stability
PP&Econstantly increasing, while it should decrease over time
ROA and ROElow and inconsistent
D/E ratioconstantly on the rise and far higher than the desired 0.80
Retained Earningsnone
Free Cash Flowis constantly negative due to high CAPEX
CAPEX/Net income ratioexceeds the desired 25%
Dividendsrapidly incresing
Stock buybacks & dividends as a % of FCFunable to calculate due to a negative FCF
In the left column of the table is a set of indicators to pay attention to when analyzing businesses. In the right column is the interpretation of each of those indicators relative to the standards described in the book “Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage” by Marry Buffett and David Clark.

Does ALTG have a competitive advantage over its peers?

Most likely, yes. The company went public in 2020, and its financial history is not long enough to say for sure. By looking at its key metrics, it’s obvious that the company is now in the stage of expansion and growth (high goodwill, interest expense, and liabilities). Plus, right now, the company doesn’t yield much for investors (low ROA and ROE), but we can already see trend lines for revenues, profit margins, and other metrics (even dividends) are all heading up, meaning the company is heading in the right direction.

Is Alta Equipment Group Inc.’s stock worth buying?

Although the company may possess a competitive advantage, it needs to demonstrate this through a track record of strong performance over a minimum of 10 years. So, buying its shares now will be too risky and could result in a loss of money. In the web story below, you can see the values of the company’s MRQ and TTM KPIs, as well as whether it’s a bargain investment:


Article Sources

The data displayed on the charts was collected from the following reports:

1.Alta Equipment Group Inc.’s website. “altg.com, https://altg.com/.”

2.GOOGLE SERP SECTION. “Alta Equipment Group Inc. competitors, https://www.google.com/search?q=aarons&sca_esv=1a5929d447859cf0&rlz=1C1CHBF_esAR1102AR1102&sxsrf=ADLYWIKl-J59DvW_Ah5JPKyD87OiH87gaQ%3A1715906013606&ei=3aVGZsfUJMWk5OUPtsy3kAI&gs_ssp=eJzj4tTP1TcwyTHIy1JgNGB0YPBiS0wsys8rBgBEeAYd&oq=AA&gs_lp=Egxnd3Mtd2l6LXNlcnAiAkFBKgIIATIKECMYgAQYJxiKBTIQEC4YgAQY0QMYxwEYJxiKBTIKECMYgAQYJxiKBTIKECMYgAQYJxiKBTILEAAYgAQYkQIYigUyCxAAGIAEGJECGIoFMgoQABiABBhDGIoFMgoQABiABBhDGIoFMgoQABiABBhDGIoFMgoQABiABBhDGIoFMh0QLhiABBjRAxjHARiKBRiXBRjcBBjeBBjgBNgBAUjFIVAAWERwAHgBkAEAmAGMAaAB8gGqAQMwLjK4AQHIAQD4AQGYAgOgAocRwgIEECMYJ8ICERAuGIAEGJECGNEDGMcBGIoFwgILEC4YgAQY0QMYxwHCAgUQLhiABJgDALoGBggBEAEYFJIHBzAuMi43LTGgB-of&sclient=gws-wiz-serp.”

Alta Equipment Company's store in Detroit, Michigan