Head-To-Head Survey: K2M Group (KTWO) versus Luminex (LMNX)

K2M Group (NASDAQ: KTWO) and Luminex (NASDAQ:LMNX) 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, profitability, dividends, institutional ownership, risk and earnings.

Volatility & Risk

K2M Group has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, Luminex has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500.

Profitability

This table compares K2M Group and Luminex’s 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%
Luminex 10.60% 8.07% 7.33%

Institutional and Insider Ownership

81.9% of Luminex shares are held by institutional investors. 6.0% of K2M Group shares are held by company insiders. Comparatively, 7.4% of Luminex shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares K2M Group and Luminex’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
K2M Group $258.03 million 3.76 -$37.14 million ($0.87) -25.71
Luminex $306.57 million 4.49 $29.42 million $0.91 34.07

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

Dividends

Luminex pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. K2M Group does not pay a dividend. Luminex pays out 26.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for K2M Group and Luminex, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
K2M Group 0 1 10 0 2.91
Luminex 0 3 1 0 2.25

K2M Group presently has a consensus target price of $24.80, suggesting a potential upside of 10.86%. Luminex has a consensus target price of $23.00, suggesting a potential downside of 25.81%. Given K2M Group’s stronger consensus rating and higher probable upside, research analysts clearly believe K2M Group is more favorable than Luminex.

Summary

Luminex beats K2M Group on 11 of the 16 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 Luminex

Luminex Corporation develops, manufactures, and sells proprietary biological testing technologies and products for the diagnostics, pharmaceutical, and research industries worldwide. Its products include Luminex 100/200 that integrates fluidics, optics, and digital signal processing; FLEXMAP 3D system for use as a general laboratory instrument; MAGPIX system, a multiplexing analyzer for qualitative and quantitative analysis of proteins and nucleic acids; ARIES system, a sample to answer real-time PCR platform; ARIES M1 system, a single-module version of the ARIES System; and VERIGENE system, an automated multiplex-capable system. The company also provides MicroPlex, MagPlex, xTAG, SeroMAP, and calibration and control microspheres; xPONENT, a software suite to simplify laboratory workflow and enhance productivity; SYNCT data management software solutions; and xTAG assays and products to identify the causative agent for respiratory and gastrointestinal infections, as well as IVD kits for cystic fibrosis genotyping and pharmacogenetic assays used to profile genetic mutations related to drug metabolism. In addition, it offers MultiCode assays and products comprising HSV 1&2 assays, analyte specific reagents, and other products to detect infectious agents in clinical samples; ARIES cassettes that are self-contained assay consumables, such as ARIES HSV 1&2 assays, ARIES FLU A/B and RSV assays, ARIES group B strep assays, ARIES group A strep assays, ARIES bordetella assays, and ARIES C. difficile assays; and VERIGENE test cartridges, as well as operates as an original equipment manufacturer of custom reagents and instrumentation. The company serves pharmaceutical companies, clinical laboratories, and research and medical institutions. Luminex Corporation was founded in 1995 and is based in Austin, Texas.

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