Analyst Summary
- biote Corp. reported a 6.4% increase in total revenue, reaching $197.19 million in 2024, driven by increased procedure revenue and sales of disposable trocars and bioidentical hormone pellets.
- Net income improved from a loss of $2.81 million in 2023 to a profit of $46 thousand in 2024.
- Gross margin slightly improved to 70.5% in 2024 from 68.8% in 2023, indicating improved cost management.
- Operating margin also saw a slight increase to 16.0% in 2024 from 15.5% in 2023.
- Cash and cash equivalents decreased significantly by 55.8% to $39.34 million in 2024.
- The company appointed Bret Christensen as Chief Executive Officer on February 1, 2025.
- The acquisition of Asteria Health is expected to improve supply chain control and reduce production costs.
- A material weakness in internal control over financial reporting was identified, which could impair the company’s ability to produce timely and accurate financial statements.
Opportunities and Risks
- Risk: Reliance on third-party manufacturers for bioidentical hormone pellets and dietary supplements poses a supply chain risk.
- Risk: The hormone optimization and dietary supplement industries are subject to regulatory scrutiny by the FDA and FTC.
- Risk: Significant competition exists in both the hormone optimization and dietary supplement markets.
- Risk: Geographic concentration of revenue makes the company vulnerable to regional economic and regulatory changes.
- Risk: Ongoing litigation could result in unexpected expenses and reputational harm.
- Risk: Decreased Liquidity: Cash and cash equivalents decreased significantly from 2023 to 2024.
- Opportunity: Plans to expand operations into new geographic areas within the United States and internationally.
- Opportunity: Commitment to advancing healthcare through product improvement and expanding its line of Biote-branded dietary supplements.
- Opportunity: Continued evaluation of selective business development opportunities through strategic acquisitions.
- Opportunity: Clinical research program supports education programs through systematic literature reviews and analysis of patient therapy effects in clinical practice.
Potential Implications
Company Performance
- The company’s strategic acquisitions and geographic expansion plans present opportunities for future growth.
- The decrease in liquidity and the identified material weakness in internal controls warrant careful monitoring.
Stock Price
- Monitor Regulatory Landscape: Stay informed about changes in FDA and FTC regulations related to compounded drugs and dietary supplements.
- Assess Supply Chain Risks: Evaluate the company’s plans to mitigate risks associated with reliance on third-party manufacturers.
- Track Geographic Expansion: Monitor the company’s progress in expanding into new markets and its ability to maintain market share in core regions.
- Evaluate Internal Control Remediation: Assess the effectiveness of the company’s efforts to remediate the identified material weakness in internal controls.
- Monitor Litigation: Track the progress of ongoing litigation and its potential impact on the company’s financial performance.
biote Corp. (BTMD) – Form 10-K Analysis (FY 2024)
Executive Summary
This report analyzes biote Corp.’s 10-K filing for the fiscal year ended December 31, 2024. The company operates in the hormone optimization space, providing a practice-building platform for practitioners. Revenue increased modestly, but net income remained near breakeven. Key risks include reliance on third-party manufacturers, regulatory scrutiny, and competition. Opportunities exist in geographic expansion, new product development, and strategic acquisitions. Overall, a cautious approach is warranted, given the competitive landscape and regulatory uncertainties.
Company Overview
biote Corp. provides a practice-building platform for practitioners in the hormone optimization space. The company offers training, software, and support services to enable practitioners to offer bioidentical hormone replacement therapy. It also sells a line of Biote-branded dietary supplements. The company operates primarily in the United States, with a concentration in the South and Southwest. Recent developments include a CEO transition and acquisitions aimed at vertical integration.
Financial Statement Analysis
Key Financial Data (in thousands)
| Metric |
2024 |
2023 |
Change |
| Total Revenue |
$197,191 |
$185,360 |
6.4% |
| Net Income (Loss) |
$46 |
$(2,805) |
N/A |
| Cost of Revenue |
$58,130 |
$57,877 |
0.4% |
| Selling, General & Administrative Expenses |
$107,450 |
$98,826 |
8.7% |
| Cash and Cash Equivalents |
$39,342 |
$89,002 |
-55.8% |
Key Ratios
- Gross Margin: (Revenue – Cost of Revenue) / Revenue = (197,191 – 58,130) / 197,191 = 70.5% (2024), (185,360 – 57,877) / 185,360 = 68.8% (2023). A slight improvement in gross margin.
- Operating Margin: Income from Operations / Revenue = 31,611 / 197,191 = 16.0% (2024), 28,657 / 185,360 = 15.5% (2023). A slight improvement in operating margin.
- Liquidity (Current Ratio): Current Assets / Current Liabilities = 68,127 / 51,514 = 1.32 (2024), 122,343 / 22,215 = 5.51 (2023). Significant decrease in liquidity.
- Debt-to-Equity Ratio: Total Liabilities / Total Stockholders’ Deficit = 224,570 / |-102,200| = 2.20 (2024), 191,841 / |-36,546| = 5.25 (2023). Significant decrease in leverage.
Management’s Discussion and Analysis (MD&A) Insights
- Revenue Growth: Management attributes the revenue increase to a rise in procedure revenue and sales of disposable trocars and bioidentical hormone pellets.
- Cost Management: Cost of revenue remained relatively stable despite increased volume, suggesting improved cost management.
- Strategic Acquisitions: The acquisition of Asteria Health is expected to improve supply chain control and reduce production costs.
- Chief Executive Officer Transition: The company appointed Bret Christensen as Chief Executive Officer on February 1, 2025.
Risk Assessment
- Reliance on Third-Party Manufacturers: The company relies on third-party manufacturers for bioidentical hormone pellets and dietary supplements, posing a supply chain risk.
- Regulatory Scrutiny: The hormone optimization and dietary supplement industries are subject to regulatory scrutiny by the FDA and FTC.
- Competition: The company faces significant competition in both the hormone optimization and dietary supplement markets.
- Geographic Concentration: A significant portion of revenue is generated in a limited number of states, making the company vulnerable to regional economic and regulatory changes.
- Legal Proceedings: The company is involved in ongoing litigation, which could result in unexpected expenses and reputational harm.
- Material Weakness in Internal Controls: The company has identified a material weakness in its internal control over financial reporting, which could impair its ability to produce timely and accurate financial statements.
- Decreased Liquidity: Cash and cash equivalents decreased significantly from 2023 to 2024.
Opportunity Assessment
- Geographic Expansion: The company plans to expand its operations into new geographic areas within the United States and internationally.
- New Product Development: The company is committed to advancing healthcare through product improvement and expanding its line of Biote-branded dietary supplements.
- Strategic Acquisitions: The company has historically reinvested its revenue to fund its geographic expansion and will continue to evaluate selective business development opportunities.
- Clinical Research Support: The clinical research program supports education programs through systematic literature reviews and analysis of patient therapy effects in clinical practice.
Uncommon Metrics & Observations
- Practitioner Retention Rate: The company boasts a high practitioner retention rate (over 95%), indicating satisfaction with the Biote Method.
- Procedure-Based Revenue Model: The company’s revenue model is based on procedures performed, providing consistency and predictability.
- Integration of BioTracker Software: The BioTracker software is integrated with outsourcing facilities’ software to facilitate ordering and inventory control.
Conclusion
biote Corp. demonstrates growth potential in the hormone optimization market. However, investors should be aware of the risks associated with regulatory scrutiny, competition, and reliance on third-party manufacturers. The company’s strategic acquisitions and geographic expansion plans present opportunities for future growth. The decrease in liquidity and the identified material weakness in internal controls warrant careful monitoring. Overall, a cautious approach is recommended.
Actionable Insights
- Monitor Regulatory Landscape: Stay informed about changes in FDA and FTC regulations related to compounded drugs and dietary supplements.
- Assess Supply Chain Risks: Evaluate the company’s plans to mitigate risks associated with reliance on third-party manufacturers.
- Track Geographic Expansion: Monitor the company’s progress in expanding into new markets and its ability to maintain market share in core regions.
- Evaluate Internal Control Remediation: Assess the effectiveness of the company’s efforts to remediate the identified material weakness in internal controls.
- Monitor Litigation: Track the progress of ongoing litigation and its potential impact on the company’s financial performance.
1. Commentary
BioTE Corp. demonstrates a slight improvement in financial performance, transitioning from a net loss in 2023 to a marginal net income in 2024. Revenue increased modestly, driven primarily by product revenue, while cost of revenue remained relatively stable. Significant expenses related to selling, general, and administrative activities continue to impact profitability. The company’s cash position decreased substantially, influenced by financing activities, particularly share repurchases.
2. Financial Ratio and Metric Analysis
Profitability
Gross Profit Margin
Metric: (($197,191 – $58,130) / $197,191) = 70.52%
Trend: (($185,360 – $57,877) / $185,360) = 68.77%. The gross profit margin increased from 68.77% to 70.52%, a 2.54% increase.
Industry: The medical devices and supplies industry generally has gross profit margins ranging from 50% to 75%. BioTE’s gross profit margin falls within this range.
Operating Profit Margin
Metric: ($31,611 / $197,191) = 16.03%
Trend: ($28,657 / $185,360) = 15.46%. The operating profit margin increased from 15.46% to 16.03%, a 3.69% increase.
Industry: A good operating margin for medical device companies is typically between 15% and 20%. BioTE’s operating margin is within this range.
Net Profit Margin
Metric: ($46 / $197,191) = 0.02%
Trend: ($-2,805 / $185,360) = -1.51%. The net profit margin improved from -1.51% to 0.02%.
Industry: The medical device industry typically sees net profit margins between 5% and 15%. BioTE’s net profit margin is significantly below this range.
Return on Assets (ROA)
Metric: ($46 / $122,370) = 0.04%
Trend: ($-2,805 / $155,295) = -1.81%. The ROA improved from -1.81% to 0.04%.
Industry: The medical device industry typically sees ROA between 3% and 7%. BioTE’s ROA is significantly below this range.
Return on Equity (ROE)
Metric: ($46 / (-$102,200)) = -0.05%
Trend: ($-2,805 / (-$36,546)) = 7.67%. The ROE decreased from 7.67% to -0.05%.
Industry: The medical device industry typically sees ROE between 10% and 15%. BioTE’s ROE is significantly below this range.
Earnings Per Share (EPS) – Basic and Diluted
Metric: $0.09
Trend: $0.13. EPS decreased from $0.13 to $0.09, a 30.77% decrease.
Industry: EPS varies widely in the medical device industry, but positive EPS is generally expected.
Liquidity
Current Ratio
Metric: ($68,127 / $51,514) = 1.32
Trend: ($122,343 / $22,215) = 5.51. The current ratio decreased from 5.51 to 1.32, a 76.01% decrease.
Industry: A current ratio between 1.5 and 2.0 is generally considered healthy. BioTE’s current ratio is below this range.
Quick Ratio (Acid-Test Ratio)
Metric: (($68,127 – $14,845) / $51,514) = 1.03
Trend: (($122,343 – $17,307) / $22,215) = 4.73. The quick ratio decreased from 4.73 to 1.03, a 78.22% decrease.
Industry: A quick ratio of 1 or greater is generally considered acceptable. BioTE’s quick ratio is around this range.
Cash Ratio
Metric: ($39,342 / $51,514) = 0.76
Trend: ($89,002 / $22,215) = 4.01. The cash ratio decreased from 4.01 to 0.76, a 81.05% decrease.
Industry: A cash ratio of 0.5 or higher is generally considered acceptable. BioTE’s cash ratio is above this range.
Solvency/Leverage
Debt-to-Equity Ratio
Metric: ($224,570 / (-$102,200)) = -2.20
Trend: ($191,841 / (-$36,546)) = -5.25. The debt-to-equity ratio decreased from -5.25 to -2.20, a 58.09% decrease.
Industry: The medical device industry typically sees debt-to-equity ratios between 0.5 and 1.5. BioTE’s debt-to-equity ratio is outside this range.
Debt-to-Assets Ratio
Metric: ($224,570 / $122,370) = 1.84
Trend: ($191,841 / $155,295) = 1.24. The debt-to-assets ratio increased from 1.24 to 1.84, a 48.39% increase.
Industry: The medical device industry typically sees debt-to-assets ratios between 0.2 and 0.6. BioTE’s debt-to-assets ratio is significantly above this range.
Interest Coverage Ratio (Times Interest Earned)
Metric: ($31,611 / $11,001) = 2.87
Trend: ($28,657 / $6,363) = 4.50. The interest coverage ratio decreased from 4.50 to 2.87, a 36.22% decrease.
Industry: An interest coverage ratio of 3 or higher is generally considered safe. BioTE’s interest coverage ratio is below this range.
Activity/Efficiency
Inventory Turnover
Metric: ($58,130 / $14,845) = 3.92
Trend: ($57,877 / $17,307) = 3.34. The inventory turnover increased from 3.34 to 3.92, a 17.37% increase.
Industry: Inventory turnover varies widely in the medical device industry, but a turnover of 4 to 6 is generally considered efficient. BioTE’s inventory turnover is below this range.
Days Sales Outstanding (DSO)
Metric: ($7,631 / $197,191) * 365 = 14.15
Trend: ($6,809 / $185,360) * 365 = 13.41. The days sales outstanding increased from 13.41 to 14.15, a 5.52% increase.
Industry: A DSO of 30 to 45 days is generally considered acceptable. BioTE’s DSO is below this range.
Days Payable Outstanding (DPO)
Metric: ($5,813 / $58,130) * 365 = 36.51
Trend: ($4,155 / $57,877) * 365 = 26.21. The days payable outstanding increased from 26.21 to 36.51, a 39.37% increase.
Industry: A DPO of 30 to 45 days is generally considered acceptable. BioTE’s DPO is within this range.
Asset Turnover
Metric: ($197,191 / $122,370) = 1.61
Trend: ($185,360 / $155,295) = 1.19. The asset turnover increased from 1.19 to 1.61, a 35.29% increase.
Industry: An asset turnover of 1.0 or higher is generally considered efficient. BioTE’s asset turnover is above this range.
Valuation
Price-to-Earnings Ratio (P/E)
Metric: $3.76 / $0.09 = 41.78
Trend: $3.76 / $0.13 = 28.92. The P/E ratio increased from 28.92 to 41.78, a 44.47% increase.
Industry: The medical device industry typically sees P/E ratios between 20 and 30. BioTE’s P/E ratio is above this range.
Price-to-Book Ratio (P/B)
Metric: Market Cap = Shares Outstanding * Stock Price
Shares Outstanding = 31,485,777 + 5,221,653 = 36,707,430
Market Cap = 36,707,430 * $3.76 = $138,001,945
Book Value = Total Stockholders’ Equity = -$102,200,000
P/B Ratio = $138,001,945 / (-$102,200,000) = -1.35
Trend: Market Cap = Shares Outstanding * Stock Price
Shares Outstanding = 34,254,883 + 28,819,066 = 63,073,949
Market Cap = 63,073,949 * $3.76 = $237,156,018
Book Value = Total Stockholders’ Equity = -$36,546,000
P/B Ratio = $237,156,018 / (-$36,546,000) = -6.49
The P/B ratio increased from -6.49 to -1.35, a 79.20% increase.
Industry: A P/B ratio between 1 and 3 is generally considered acceptable. BioTE’s P/B ratio is outside this range.
Price-to-Sales Ratio (P/S)
Metric: $138,001,945 / $197,191,000 = 0.70
Trend: $237,156,018 / $185,360,000 = 1.28. The P/S ratio decreased from 1.28 to 0.70, a 45.31% decrease.
Industry: The medical device industry typically sees P/S ratios between 2 and 4. BioTE’s P/S ratio is below this range.
Enterprise Value to EBITDA (EV/EBITDA)
Metric: Market Cap = $138,001,945
Total Debt = $109,375,000 – $1,926,000 = $107,449,000
Cash = $39,342,000
Enterprise Value = $138,001,945 + $107,449,000 – $39,342,000 = $206,108,945
EV/EBITDA = $206,108,945 / $58,225,000 = 3.54
Trend: Market Cap = $237,156,018
Total Debt = $115,625,000 – $2,745,000 = $112,880,000
Cash = $89,002,000
Enterprise Value = $237,156,018 + $112,880,000 – $89,002,000 = $261,034,018
EV/EBITDA = $261,034,018 / $55,256,000 = 4.72
The EV/EBITDA ratio decreased from 4.72 to 3.54, a 24.94% decrease.
Industry: The medical device industry typically sees EV/EBITDA ratios between 10 and 15. BioTE’s EV/EBITDA ratio is below this range.
Growth Rates
Revenue Growth
Metric: ($197,191 – $185,360) / $185,360 = 6.38%
Industry: The medical device industry typically sees revenue growth between 5% and 10%. BioTE’s revenue growth is within this range.
Net Income Growth
Metric: ($46 – (-$2,805)) / (-$2,805) = -101.64%
Industry: Net income growth varies widely in the medical device industry.
EPS Growth
Metric: ($0.09 – $0.13) / $0.13 = -30.77%
Industry: EPS growth varies widely in the medical device industry.
Other Relevant Metrics
Adjusted EBITDA
Metric: $58,225 (in thousands)
Trend: $55,256 (in thousands). Adjusted EBITDA increased from $55,256 to $58,225, a 5.37% increase.
Significance: Adjusted EBITDA is a non-GAAP metric that provides a view of the company’s operating performance by excluding certain non-cash and non-recurring items. It is calculated by adding back interest expense, income tax expense, depreciation and amortization, share-based compensation expense, litigation expenses, legal settlement loss, inventory fair value write-up, transaction-related expenses, other expenses, merger and acquisition expenses, loss from change in fair value of warrant liability, and loss from change in fair value of earnout liabilities to net income (loss). The adjustments appear reasonable as they remove items that are not indicative of the company’s core operating performance.
⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️