EndoChoice Holdings (NYSE: GI) and NxStage Medical (NASDAQ:NXTM) are both healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitabiliy, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Profitability

This table compares EndoChoice Holdings and NxStage Medical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EndoChoice Holdings -90.67% -130.29% -60.59%
NxStage Medical -1.25% -2.31% -1.47%

Earnings and Valuation

This table compares EndoChoice Holdings and NxStage Medical’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EndoChoice Holdings N/A N/A N/A ($2.67) -3.00
NxStage Medical $374.00 million 4.13 $14.68 million ($0.07) -335.67

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

Institutional and Insider Ownership

37.3% of EndoChoice Holdings shares are owned by institutional investors. Comparatively, 94.9% of NxStage Medical shares are owned by institutional investors. 31.5% of EndoChoice Holdings shares are owned by company insiders. Comparatively, 4.7% of NxStage Medical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

EndoChoice Holdings has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, NxStage Medical has a beta of 0.16, indicating that its share price is 84% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for EndoChoice Holdings and NxStage Medical, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EndoChoice Holdings 0 2 1 0 2.33
NxStage Medical 0 1 3 0 2.75

EndoChoice Holdings currently has a consensus target price of $7.00, indicating a potential downside of 12.50%. NxStage Medical has a consensus target price of $31.75, indicating a potential upside of 35.11%. Given NxStage Medical’s stronger consensus rating and higher probable upside, analysts clearly believe NxStage Medical is more favorable than EndoChoice Holdings.

Summary

NxStage Medical beats EndoChoice Holdings on 9 of the 11 factors compared between the two stocks.

About EndoChoice Holdings

EndoChoice Holdings, Inc. is a medical device company. The Company is focused on designing and commercializing a platform of products and services for gastrointestinal (GI) caregivers. The Company offers a range of products and services that span single-use devices and infection control products, pathology and imaging systems. The Company’s products are used in colonoscopy and procedures of the upper GI tract, including esophagogastroduodenoscopy (EGD). The Company’s imaging products include Fuse system, EndoCart, and Endoscope repair and maintenance. The Company’s single-use therapeutic devices include Neptune injection needle, Boa polypectomy snare, Rescue retrieval devices, Blox bite block, TrapEase polyp traps, Hydra irrigation system, EndoGlide+, Compliance EndoKit, SafeStart, EndoKit, CinchPad and GI pathology. The Company serves over 2,500 GI departments that perform endoscopic procedures.

About NxStage Medical

NxStage Medical, Inc. is a medical technology company. The Company develops, manufactures and markets products and services for patients suffering from chronic or acute kidney failure. It operates through three segments. The System One segment includes revenues from the sale and rental of the System One and PureFlow SL dialysate preparation equipment and the sale of disposable products in the home and critical care markets. The In-Center segment includes revenues from the sale of blood tubing sets and needles for hemodialysis, primarily for the treatment of end-stage renal disease patients at dialysis clinics, and needles for apheresis. It markets extracorporeal disposable products under the Medisystems brand. The Services segment includes revenues from dialysis services provided to patients at its NxStage Kidney Care dialysis centers. Its product offerings include Home Dialysis, Next-Generation Hemodialysis System, Critical Care, Next-Generation Critical Care System and In-Center.

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