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  "documentTitle": "AtriCure, Inc. (ATRC)",
  "authorId": "53_Kerrisdale_Capital",
  "authorName": "Kerrisdale Capital",
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  "presentationDate": "2020-09-01 00:00:00",
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  "notes": "The slide uses a narrative-heavy format to dismantle the company's growth thesis.",
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      "text": "The unfortunate implication for investors is that while AtriCure's core business has grown at a double-digit rate for over a decade, that growth will come to a screeching halt in the very near term.",
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      "text": "That market, which underlies AtriCure's core open-heart and AtriClip segments, and over two thirds of its revenues, has been portrayed by the company as vast and underpenetrated. Investors have accepted the proposition that AtriCure's core surgical business has many years of growth before it. But an even cursory look into the data reveals a reality at odds with the company's portrayal of the market. The addressable surgical ablation market comprises only about 10% of overall open-heart surgeries, in contrast to AtriCure's claims that one third of those patients suffer preoperative AF. Meanwhile, the market is approximately 80% penetrated, rather than the 20-25% figure that AtriCure asserts, and AtriCure's share of that market is over 90%. The unfortunate implication for investors is that while AtriCure's core business has grown at a double-digit rate for over a decade, that growth will come to a screeching halt in the very near term.",
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      "text": "AtriCure currently trades at 7.5x the revenue generated in 2019, and about 7x consensus estimates of the revenue to be generated in the next twelve months. We expect that AtriCure will recover from the pandemic-driven decline in cardiac surgeries to eventually regain its peak revenues, but that will be thin gruel for investors. The company operates a business that has shown itself to be structurally unprofitable and incapable of generating operating leverage even in the best of times. But those times are over. A likely side effect of the rapid technological advancement of catheter ablation will be the complete collapse of AtriCure's business.",
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