K2M Group (KTWO) and Valeritas (VLRX) Head to Head Comparison

K2M Group (NASDAQ: KTWO) and Valeritas (NASDAQ:VLRX) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.

Earnings & Valuation

This table compares K2M Group and Valeritas’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
K2M Group $258.03 million 3.60 -$37.14 million ($0.87) -24.59
Valeritas $20.25 million 0.52 -$49.30 million ($8.29) -0.18

K2M Group has higher revenue and earnings than Valeritas. K2M Group is trading at a lower price-to-earnings ratio than Valeritas, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

99.1% of K2M Group shares are owned by institutional investors. Comparatively, 4.9% of Valeritas shares are owned by institutional investors. 6.0% of K2M Group shares are owned by insiders. Comparatively, 1.2% of Valeritas shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for K2M Group and Valeritas, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
K2M Group 0 1 9 0 2.90
Valeritas 0 1 2 0 2.67

K2M Group currently has a consensus target price of $24.44, indicating a potential upside of 14.28%. Valeritas has a consensus target price of $11.00, indicating a potential upside of 643.24%. Given Valeritas’ higher possible upside, analysts plainly believe Valeritas is more favorable than K2M Group.

Risk and Volatility

K2M Group has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500. Comparatively, Valeritas has a beta of 4.45, suggesting that its stock price is 345% more volatile than the S&P 500.

Profitability

This table compares K2M Group and Valeritas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
K2M Group -14.27% -15.38% -10.00%
Valeritas -225.97% -1,768.69% -90.30%

Summary

K2M Group beats Valeritas on 11 of the 13 factors compared between the two stocks.

About K2M Group

K2M Group Holdings, Inc., a medical device company, provides spine and minimally invasive solutions in the United States and internationally. The company offers implants, disposables, and instruments primarily to hospitals for use by spine surgeons to treat spinal pathologies, such as deformity, trauma, and tumor. Its complex spine products include EVEREST, MESA, and MESA 2 deformity spinal systems; NILE alternative and proximal fixation spinal systems; MESA rail deformity spinal systems; Cricket spinal correction rod reduction instrumentation; CAPRI corpectomy cage systems; MESA small stature, rail small stature, and mini spinal systems; SERENGETI complex spine minimally invasive retractor systems; RAVINE complex spine lateral access systems; SANTORINI corpectomy cage systems; YUKON OCT spinal systems; and PALO ALTO cervical static corpectomy cage systems. The company's minimally invasive surgery products consist of EVEREST minimally invasive spinal and XT spinal, SERENGETI minimally invasive retractor, MOJAVE PL 3D expandable interbody, RAVINE lateral access, CASCADIA lateral 3D interbody, ALEUTIAN lateral interbody, and TERRA NOVA minimally invasive access systems. In addition, its degenerative spine products comprise EVEREST degenerative spinal, CASCADIA and ALEUTIAN interbody, SAHARA AL expandable stabilization, RHINE cervical disc, CHESAPEAKE interbody, PYRENEES cervical plate, and BLUE RIDGE hybrid cervical plate systems. Further, the company provides Balance ACS, a platform that includes tools to assist surgeons with obtaining authorization from healthcare insurers. K2M Group Holdings, Inc. markets and sells its products through direct sales employees, independent sales agencies, and distributor partners. The company was founded in 2004 and is headquartered in Leesburg, Virginia.

About Valeritas

Valeritas, Inc. is a United States-based company, which is engaged in developing and commercializing treatment solutions that contribute to clinical outcomes for patients. The Company’s portfolio includes V-Go disposable insulin delivery device, which is distributed through retail pharmacy. Its V-Go delivers insulin at a continuous preset basal rate and bolus dosing for adults with Type 2 diabetes requiring insulin. Its development portfolio also includes the h-Patch technology, the Mini-Ject pre-filled needle-free delivery system and the Micro-Trans microneedle transdermal delivery patch. Its h-Patch is a controlled delivery technology platform designed to deliver drugs into subcutaneous tissue. The Mini-Ject represents needle-free injection system, combining a range of fully disposable pre-filled options. Micro-Trans microneedle array patch technology enables drug delivery into the dermis without limitations of drug size, structure, charge or the patient’s skin characteristics.

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