Comparing IRIDEX (IRIX) & Cutera (CUTR)

IRIDEX (NASDAQ: IRIX) and Cutera (NASDAQ:CUTR) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

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This table compares IRIDEX and Cutera’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IRIDEX -30.93% -35.98% -28.84%
Cutera 19.80% 18.31% 11.39%

Earnings and Valuation

This table compares IRIDEX and Cutera’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IRIDEX $41.59 million 1.59 -$12.86 million ($1.11) -5.11
Cutera $151.49 million 4.61 $29.99 million $0.77 66.75

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

Insider and Institutional Ownership

48.2% of IRIDEX shares are held by institutional investors. Comparatively, 95.3% of Cutera shares are held by institutional investors. 5.0% of IRIDEX shares are held by insiders. Comparatively, 11.6% of Cutera shares are held 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 Recommendations

This is a breakdown of recent recommendations and price targets for IRIDEX and Cutera, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IRIDEX 0 0 1 0 3.00
Cutera 0 1 4 0 2.80

IRIDEX presently has a consensus price target of $13.00, suggesting a potential upside of 129.28%. Cutera has a consensus price target of $43.00, suggesting a potential downside of 16.34%. Given IRIDEX’s stronger consensus rating and higher possible upside, research analysts clearly believe IRIDEX is more favorable than Cutera.

Risk & Volatility

IRIDEX has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Cutera has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Summary

Cutera beats IRIDEX on 11 of the 14 factors compared between the two stocks.

About IRIDEX

IRIDEX Corporation provides therapeutic based laser systems, delivery devices, and consumable instrumentation to treat sight-threatening eye diseases in ophthalmology. The company offers laser consoles, such as Cyclo G6 laser system used for the treatment of glaucoma; IQ 532 and IQ 577 laser systems, which are used for the treatment of diabetic macular edema and other retinal diseases; and OcuLight TX, OcuLight SL, OcuLight SLx, OcuLight GL, and OcuLight GLx laser systems, which are used to treat proliferative diabetic retinopathy, macular holes, retinal tears, and detachments. It also provides delivery devices, including TxCell scanning laser delivery system that allows the physicians to perform multi-spot pattern scanning; Slit Lamp Adapter, which allows the physicians to utilize a standard slit lamp in diagnosis and treatment procedures; and TruFocus laser indirect ophthalmoscopes for use in procedures to treat peripheral retinal disorders. In addition, the company offers MicroPulse P3 Probe, which is used with its Cylco G6 laser system that delivers laser to treat glaucoma; G-Probe, which is used in procedures to treat uncontrolled glaucoma; G-Probe Illuminate that is used in procedures to treat refractory glaucoma; and EndoProbe family of products used in vitrectomy procedures. It serves ophthalmologists, research and teaching hospitals, government installations, surgical centers, hospitals, and office clinics. IRIDEX Corporation markets its products through direct and independent sales force in the United States, as well as through independent distributors internationally. The company was formerly known as IRIS Medical Instruments, Inc. and changed its name to IRIDEX Corporation in November 1995. IRIDEX Corporation was founded in 1989 and is headquartered in Mountain View, California.

About Cutera

Cutera, Inc., a medical device company, designs, develops, manufactures, markets, and services laser and other energy based aesthetics systems worldwide. The company offers enlighten platform, a laser system that is used for tattoo removal, as well as for the treatment of benign pigmented lesions; excel HR platform, a hair removal solution for various skin types; and truSculpt, a high-powered radio frequency platform designed for deep tissue heating. It also provides excel V, a vascular and benign pigmented lesion treatment platform; and xeo platform, a multi-application platform on which a customer purchases hand piece applications for the removal of unwanted hair, treatment of vascular lesions, and skin rejuvenation by treating discoloration, fine lines, and laxity. In addition, the company offers GenesisPlus system, a laser product for use in the temporary increase of clear nails in patients with onychomycosis, as well as for the treatment of fine wrinkles, diffuse redness, and rosacea; solera console platform, including Opus and Titan consoles; and CoolGlide systems, as well as provides myQ, a third-party sourced system for the Japanese market. Further, it provides pulsed light hand pieces for the treatment of discoloration, hair removal, and vascular treatments; Pearl and Pearl Fractional hand pieces; skin care products; and post-warranty services through extended service contracts or direct billing, as well as offers Titan hand piece refills and marketing brochures through the Internet. The company markets and sells its products through direct sales force to plastic surgeons, dermatologists, gynecologists, family practitioners, primary care physicians, physicians performing aesthetic treatments in non-medical offices, and other qualified practitioners, as well as for physicians offering aesthetic treatments in non-medical offices. Cutera, Inc. was founded in 1998 and is headquartered in Brisbane, California.

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