Analyzing Catasys (NASDAQ:CATS) and Hanger (HNGR)

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

Valuation and Earnings

This table compares Hanger and Catasys’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanger $1.01 billion 0.52 -$18.96 million N/A N/A
Catasys $7.07 million 7.98 -$17.93 million ($1.75) -2.03

Catasys has lower revenue, but higher earnings than Hanger.

Risk & Volatility

Hanger has a beta of 4.51, suggesting that its share price is 351% more volatile than the S&P 500. Comparatively, Catasys has a beta of -0.3, suggesting that its share price is 130% less volatile than the S&P 500.

Profitability

This table compares Hanger and Catasys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hanger N/A N/A N/A
Catasys -146.80% N/A -210.45%

Insider & Institutional Ownership

3.8% of Hanger shares are owned by institutional investors. Comparatively, 6.4% of Catasys shares are owned by institutional investors. 2.4% of Hanger shares are owned by insiders. Comparatively, 92.2% of Catasys shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Hanger and Catasys, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanger 0 0 0 0 N/A
Catasys 0 1 1 0 2.50

Catasys has a consensus target price of $8.00, indicating a potential upside of 125.35%. Given Catasys’ higher possible upside, analysts plainly believe Catasys is more favorable than Hanger.

Summary

Catasys beats Hanger on 6 of the 10 factors compared between the two stocks.

About Hanger

Hanger, Inc. is a rehabilitative product and service company. The Company delivers orthotic and prosthetic (O&P) patient care, products, services and therapeutic solutions. The Company offers advanced prosthetics and orthotics, clinically differentiated programs and unsurpassed customer service. The Company comprises nine business units that serve various segments of the O&P industry. The Company’s segments include Patient Care, and Products & Services. The Patient Care segment includes Hanger Clinic and Linkia. The Hanger Clinic specializes in orthotic and prosthetic services and products. Linkia is a specialty healthcare company, which is engaged in the O&P management and care. The Products & Services segment includes Southern Prosthetic Supply (SPS), Accelerated Care Plus (ACP), SureFit, Innovative Neurotronics, Inc. and SPS National Labs.

About Catasys

Catasys, Inc. provides data analytics based specialized behavioral health management and integrated treatment services to health plans and other third party payors. It offers OnTrak solution to improve treatment outcomes and lower the utilization of medical and behavioral health plan services. The company’s OnTrak solution includes medical and psychosocial interventions; and a proprietary Web based clinical information platform and database, psychosocial programs, and integrated care coaching services. Its OnTrak solution combines medical and psychosocial treatments with elements of traditional disease management, case management, and ongoing member support to help organizations treat and manage populations struggling with substance dependence, depression, and anxiety to improve their health and thereby decrease their health care costs. Catasys, Inc.’s OnTrak solution includes various components, such as identification of impactable members, member engagement, enrollment/referral, provider network, outpatient medical treatment, outpatient psychosocial treatment, care coaching, monitoring and reporting, and proprietary Web-based clinical information platform. The company was formerly known as Hythiam, Inc. and changed its name to Catasys, Inc. in March 2011. Catasys, Inc. was founded in 2000 and is based in Los Angeles, California.

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