Head-To-Head Analysis: Nephros (NASDAQ:NEPH) & NeuroMetrix (NASDAQ:NURO)

Nephros (NASDAQ:NEPHGet Rating) and NeuroMetrix (NASDAQ:NUROGet Rating) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

Nephros has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, NeuroMetrix has a beta of 2.84, indicating that its stock price is 184% more volatile than the S&P 500.

Insider & Institutional Ownership

15.1% of Nephros shares are owned by institutional investors. Comparatively, 10.7% of NeuroMetrix shares are owned by institutional investors. 8.6% of Nephros shares are owned by company insiders. Comparatively, 7.0% of NeuroMetrix shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Nephros and NeuroMetrix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nephros -37.74% -25.91% -22.00%
NeuroMetrix -27.65% -14.83% -13.10%

Analyst Ratings

This is a summary of recent recommendations for Nephros and NeuroMetrix, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nephros 0 0 3 0 3.00
NeuroMetrix 0 0 0 0 N/A

Nephros currently has a consensus price target of $12.33, suggesting a potential upside of 197.19%. Given Nephros’ higher probable upside, analysts clearly believe Nephros is more favorable than NeuroMetrix.

Earnings & Valuation

This table compares Nephros and NeuroMetrix’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nephros $10.40 million 4.11 -$4.11 million ($0.41) -10.12
NeuroMetrix $8.25 million 3.34 -$2.28 million ($0.42) -9.38

NeuroMetrix has lower revenue, but higher earnings than Nephros. Nephros is trading at a lower price-to-earnings ratio than NeuroMetrix, indicating that it is currently the more affordable of the two stocks.

Summary

Nephros beats NeuroMetrix on 7 of the 13 factors compared between the two stocks.

About Nephros (Get Rating)

Nephros, Inc. develops and sells high performance water solutions to the medical and commercial markets in the United States. The company operates in three segments: Water Filtration, Pathogen Detection, and Renal Products. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also develops and sells real-time water testing systems to provide actionable data on waterborne pathogens; and medical device products for patients with renal disease, including a 2nd generation hemodiafiltration system for the treatment of patients with end stage renal disease. In addition, it offers water filters that improve the taste and odor of water, as well as reduce biofilm, bacteria, and scale build-up in downstream equipment under the Nephros and AETHER brands for the food service, hospitality, convenience store, and health care markets. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.

About NeuroMetrix (Get Rating)

NeuroMetrix, Inc., a healthcare company, engages in designing, building, and marketing medical devices that stimulate and analyze nerve response for diagnostic and therapeutic purposes in the United States, Europe, Japan, China, the Middle East, and Mexico. Its primary marketed products include DPNCheck, a nerve conduction test that is used to evaluate peripheral neuropathies, such as diabetic peripheral neuropathy; Quell, a wearable device for symptomatic relief and management of chronic pain; and ADVANCE system, a platform for the performance of nerve conduction studies. The company offers its products to managed care organizations, endocrinologists, podiatrists, and primary care physicians; occupational health, primary care, internal medicine, orthopedic, and hand surgeons; and pain medicine physicians, neurologists, physical medicine and rehabilitation physicians, and neurosurgeons. NeuroMetrix, Inc. was incorporated in 1996 and is headquartered in Woburn, Massachusetts.

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