NuVasive (NUVA) and Neogen (NEOG) Critical Review

Neogen (NASDAQ: NEOG) and NuVasive (NASDAQ:NUVA) are both mid-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, dividends, analyst recommendations, institutional ownership, valuation and profitability.

Profitability

This table compares Neogen and NuVasive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neogen 13.47% 10.72% 9.57%
NuVasive 6.36% 13.65% 6.17%

Volatility & Risk

Neogen has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500. Comparatively, NuVasive has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Institutional & Insider Ownership

64.5% of Neogen shares are owned by institutional investors. 4.2% of Neogen shares are owned by company insiders. Comparatively, 1.2% of NuVasive shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Neogen and NuVasive, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neogen 0 4 0 0 2.00
NuVasive 0 3 12 0 2.80

Neogen currently has a consensus target price of $61.33, indicating a potential upside of 4.11%. NuVasive has a consensus target price of $71.64, indicating a potential upside of 37.56%. Given NuVasive’s stronger consensus rating and higher possible upside, analysts clearly believe NuVasive is more favorable than Neogen.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Neogen $361.59 million 8.39 $43.79 million $1.01 58.62
NuVasive $962.07 million 2.76 $37.14 million $1.19 43.76

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

Summary

Neogen beats NuVasive on 8 of the 14 factors compared between the two stocks.

Neogen Company Profile

Neogen Corporation develops, manufactures and markets a range of products and services dedicated to food and animal safety. The Company operates through two segments: Food Safety and Animal Safety. The Food Safety segment produces and markets diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the production and marketing of products dedicated to animal health, including a range of consumable products marketed to veterinarians and animal health product distributors. The Animal Safety segment also provides genetic identification services. Additionally, the Animal Safety segment produces and markets rodenticides, disinfectants and insecticides to assist in the control of rodents and disease in and around agricultural, food production and other facilities.

NuVasive Company Profile

Nuvasive, Inc. is a medical device company. The Company focuses on developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine surgery. Its product portfolio focuses on applications for spine fusion surgery, including biologics used to aid in the spinal fusion process. Its principal product offering includes a minimally-disruptive surgical platform called Maximum Access Surgery (MAS). The platform includes its software-driven nerve detection and avoidance systems, including NVM5, and intraoperative monitoring services and support; MaXcess, an integrated split-blade retractor system, and a range of implants and biologics. The platform combines three product categories: its MaXcess retractors, specialized implants and fixation products, and nerve monitoring systems and service offerings that collectively enable surgeons to detect and navigate around nerves, while directing customized access to the spine for implant delivery.

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