Critical Comparison: Sientra (SIEN) and SurModics (SRDX)

SurModics (NASDAQ: SRDX) and Sientra (NASDAQ:SIEN) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Profitability

This table compares SurModics and Sientra’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SurModics 5.37% 6.18% 5.11%
Sientra -169.77% -68.82% -43.13%

Valuation & Earnings

This table compares SurModics and Sientra’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SurModics $73.11 million 5.24 $3.92 million $0.29 100.00
Sientra $20.73 million 10.90 -$40.16 million ($2.85) -4.09

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

Institutional and Insider Ownership

85.6% of SurModics shares are owned by institutional investors. Comparatively, 76.6% of Sientra shares are owned by institutional investors. 7.7% of SurModics shares are owned by insiders. Comparatively, 28.1% of Sientra shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

SurModics has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Sientra has a beta of -1.47, meaning that its share price is 247% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SurModics and Sientra, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SurModics 0 0 2 0 3.00
Sientra 0 1 4 0 2.80

SurModics presently has a consensus price target of $40.00, indicating a potential upside of 37.93%. Sientra has a consensus price target of $15.00, indicating a potential upside of 28.76%. Given SurModics’ stronger consensus rating and higher possible upside, research analysts clearly believe SurModics is more favorable than Sientra.

Summary

SurModics beats Sientra on 11 of the 14 factors compared between the two stocks.

SurModics Company Profile

Surmodics, Inc. is a provider of medical device and in vitro diagnostic technologies to the healthcare industry. The Company operates through two segments: Medical Device and In Vitro Diagnostics. The Company’s Medical Device segment consists of surface modification coating technologies to improve access, deliverability and predictable deployment of medical devices; international cardiology and peripheral balloon design, development and manufacturing, as well as drug delivery coating technologies to provide site-specific drug delivery from the surface of a medical device. The Company’s In Vitro Diagnostics segment manufactures or sells components for in vitro diagnostic immunoassay and molecular tests. The In Vitro Diagnostics segment manufactures and sells surface coatings to the diagnostic, biomedical research and life science markets. In Vitro Diagnostics segment offers protein stabilization reagents, substrates, antigens and surface coatings.

Sientra Company Profile

Sientra, Inc. is a medical aesthetics company. The Company’s primary products are silicone gel breast implants for use in breast augmentation and breast reconstruction procedures, which it offers in over 190 variations of shapes, sizes and textures. The Company sells its breast implants and breast tissue expanders, or breast products to plastic surgeons. Its breast implants are primarily used in elective procedures, which are generally performed on a cash-pay basis. TRUE Texture provides texturing on the implant shell that is designed to reduce the incidence of malposition, rotation and capsular contracture. The Company also offers breast tissue expanders and a range of other aesthetic and specialty products. The Company offers a range of HSC+ breast implants, including anatomically shaped textured, round textured and round smooth. The Company also offers miraDry system, the device to reduce underarm sweat, odor and permanently reduce hair of all colors.

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