Analyzing Tandem Diabetes Care (TNDM) & Neovasc (NVCN)

Tandem Diabetes Care (NASDAQ: TNDM) and Neovasc (NASDAQ:NVCN) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Valuation and Earnings

This table compares Tandem Diabetes Care and Neovasc’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tandem Diabetes Care $107.60 million 10.52 -$73.03 million ($12.87) -1.76
Neovasc $5.39 million 14.84 -$22.90 million ($0.37) -0.12

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

Profitability

This table compares Tandem Diabetes Care and Neovasc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tandem Diabetes Care -70.69% N/A -63.52%
Neovasc -1,687.90% -85.81% -52.15%

Institutional & Insider Ownership

47.1% of Tandem Diabetes Care shares are held by institutional investors. Comparatively, 2.2% of Neovasc shares are held by institutional investors. 9.3% of Tandem Diabetes Care shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Tandem Diabetes Care and Neovasc, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tandem Diabetes Care 0 1 8 0 2.89
Neovasc 0 0 2 0 3.00

Tandem Diabetes Care currently has a consensus price target of $15.44, indicating a potential downside of 31.72%. Neovasc has a consensus price target of $1.25, indicating a potential upside of 2,806.98%. Given Neovasc’s stronger consensus rating and higher possible upside, analysts clearly believe Neovasc is more favorable than Tandem Diabetes Care.

Volatility and Risk

Tandem Diabetes Care has a beta of -0.1, suggesting that its share price is 110% less volatile than the S&P 500. Comparatively, Neovasc has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Summary

Neovasc beats Tandem Diabetes Care on 8 of the 14 factors compared between the two stocks.

Tandem Diabetes Care Company Profile

Tandem Diabetes Care, Inc., a medical device company, designs, develops, and commercializes various products for people with insulin-dependent diabetes in the United States. The company's flagship product is the t:slim X2 insulin delivery system that comprises t:slim X2 pump, its 300-unit disposable insulin cartridge, and an infusion set. It also provides t:flex insulin delivery system that includes t:flex pump, its 480-unit disposable insulin cartridge, and an infusion set; t:slim X2 with G5 integration; and Tandem Device Updater, a PC and Mac-compatible tool that allows users to update their pump's software. In addition, the company offers t:connect diabetes management application, a cloud-based data management application, which provides a visual way to display therapy management data from the pump and supported blood glucose meters for users, their caregivers, and their healthcare providers; t:lock cartridge and infusion set products; and various pump accessories. Its products in development include automated insulin delivery systems; t:slim X2 with Basal IQ; t:slim X2 with control IQ; t:sport insulin delivery system; and connected (mobile) health mobile application. The company was formerly known as Phluid Inc. and changed its name to Tandem Diabetes Care, Inc. in January 2008. Tandem Diabetes Care, Inc. was founded in 2006 and is headquartered in San Diego, California.

Neovasc Company Profile

Neovasc Inc., a specialty medical device company, develops, manufactures, and markets cardiovascular devices worldwide. Its products include the Tiara technology for the transcatheter treatment of mitral valve disease; and the Neovasc Reducer for the treatment of refractory angina. The company also provides Peripatch tissue products. The company was formerly known as Medical Ventures Corp. and changed its name to Neovasc Inc. in July 2008. Neovasc Inc. was incorporated in 2000 and is headquartered in Richmond, Canada.

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