Edap Tms (EDAP) and Digirad (DRAD) Critical Analysis

Edap Tms (NASDAQ:EDAP) and Digirad (NASDAQ:DRAD) 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, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Edap Tms and Digirad, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Edap Tms 0 0 1 0 3.00
Digirad 0 0 0 0 N/A

Edap Tms currently has a consensus target price of $7.00, indicating a potential upside of 162.17%. Given Edap Tms’ higher probable upside, research analysts plainly believe Edap Tms is more favorable than Digirad.

Insider and Institutional Ownership

9.4% of Edap Tms shares are held by institutional investors. Comparatively, 49.4% of Digirad shares are held by institutional investors. 9.1% of Digirad 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.

Volatility and Risk

Edap Tms has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Digirad has a beta of 2.28, suggesting that its share price is 128% more volatile than the S&P 500.

Profitability

This table compares Edap Tms and Digirad’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Edap Tms -3.93% -4.08% -2.17%
Digirad -18.00% -15.04% -7.26%

Earnings and Valuation

This table compares Edap Tms and Digirad’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Edap Tms $40.74 million 1.90 -$760,000.00 ($0.01) -267.00
Digirad $118.34 million 0.13 -$35.73 million N/A N/A

Edap Tms has higher earnings, but lower revenue than Digirad.

Dividends

Digirad pays an annual dividend of $0.17 per share and has a dividend yield of 22.5%. Edap Tms does not pay a dividend. Digirad has increased its dividend for 2 consecutive years.

Summary

Edap Tms beats Digirad on 7 of the 13 factors compared between the two stocks.

About Edap Tms

EDAP TMS S.A., together with its subsidiaries, develops, produces, markets, distributes, and maintains a portfolio of minimally-invasive medical devices for the treatment of urological diseases worldwide. The company operates in two divisions: High Intensity Focused Ultrasound (HIFU), and Urology Devices and Services (UDS). The HIFU division develops, manufactures, and markets devices for the minimally invasive destruction of various types of localized tumors using HIFU technology. It offers Ablatherm, a HIFU device for the treatment of organ-confined prostate cancer, referred to as T1-T2 stage; and Focal One device, a HIFU robotic device for the focal therapy of localized prostate cancer. This division also leases equipment; sells consumables; and offers treatment related services and maintenance services. The UDS division develops, manufactures, markets, and services medical devices for the minimally invasive diagnosis or treatment of urological disorders, primarily urinary stones and other clinical indications. It offers lithotripters, such as Sonolith i-move and Sonolith i-sys for the treatment of urinary tract stones by means of extracorporeal shockwave lithotripsy technology. This division also leases lithotripters; sells disposables and spare parts; and provides maintenance services. The company markets and sells its products through its direct marketing and sales organization, as well as through third-party distributors and agents. Its customers include public and private hospitals, urology clinics, and research institutions. The company was founded in 1979 and is headquartered in Vaulx-en-Velin, France.

About Digirad

Digirad Corporation provides healthcare solutions in the United States. It operates through Diagnostic Services, Mobile Healthcare, and Diagnostic Imaging segments. The Diagnostic Services segment provides nuclear and ultrasound imaging services to physicians who perform nuclear imaging, echocardiography, vascular or general ultrasound tests, imaging systems, radiopharmaceuticals, and licensing services, as well as offers remote cardiac event monitoring services. The Mobile Healthcare segment offers contract diagnostic imaging services, including computerized tomography (CT), magnetic resonance imaging (MRI), positron emission tomography (PET), PET/CT, and nuclear medicine and healthcare services to hospitals, integrated delivery networks, and federal institutions on a long-term contract basis, as well as provisional services to institutions that are in transition. The Diagnostic Imaging segment develops and sells gamma camera imaging systems, such as nuclear cardiac imaging systems and general purpose nuclear imaging systems to physician offices and hospitals; and offers camera maintenance services. Digirad Corporation was founded in 1985 and is headquartered in Suwanee, Georgia.

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