Novadaq Technologies (NASDAQ: NVDQ) and Avinger (NASDAQ:AVGR) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitabiliy and analyst recommendations.

Insider and Institutional Ownership

88.3% of Novadaq Technologies shares are held by institutional investors. Comparatively, 61.1% of Avinger shares are held by institutional investors. 30.5% of Avinger shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Novadaq Technologies and Avinger, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novadaq Technologies 0 8 5 0 2.38
Avinger 0 3 2 0 2.40

Novadaq Technologies currently has a consensus price target of $11.64, suggesting a potential downside of 0.91%. Avinger has a consensus price target of $5.33, suggesting a potential upside of 1,073.19%. Given Avinger’s stronger consensus rating and higher probable upside, analysts plainly believe Avinger is more favorable than Novadaq Technologies.

Valuation & Earnings

This table compares Novadaq Technologies and Avinger’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novadaq Technologies $83.42 million 8.14 -$47.39 million ($1.04) -11.30
Avinger $18.17 million 0.60 -$47.92 million ($3.01) -0.15

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

Profitability

This table compares Novadaq Technologies and Avinger’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novadaq Technologies -71.97% -49.93% -41.47%
Avinger -304.43% -2,432.46% -115.58%

Volatility & Risk

Novadaq Technologies has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Avinger has a beta of -0.27, indicating that its share price is 127% less volatile than the S&P 500.

Summary

Novadaq Technologies beats Avinger on 10 of the 13 factors compared between the two stocks.

Novadaq Technologies Company Profile

NOVADAQ Technologies Inc. is a medical device company. The Company primarily develops, manufactures and markets real-time fluorescence imaging products that are designed for use by surgeons in the operating room and other clinical settings where open and minimally invasive surgery or interventional procedures are performed. The Company’s SPY fluorescence imaging technology platform (SPY Fluorescence Imaging) provides clinically relevant anatomic and physiologic images of blood flow in vessels and micro-vessels during a range of surgical and outpatient procedures performed in the operating room or clinic. The SPY Fluorescence Imaging platform can be used to develop imaging devices specifically designed to meet the needs of different surgeons and other healthcare providers and the specialty procedures they perform. SPY images enable physicians treating life-threatening illnesses, such as breast, head and neck, colon, complex hernias, diabetes and certain cardiovascular diseases.

Avinger Company Profile

Avinger, Inc. is a commercial-stage medical device company. The Company designs, manufactures and sells image-guided, catheter-based systems that are used by physicians to treat patients with peripheral arterial disease (PAD). The Company focuses on introducing products based on its lumivascular platform, which is an intravascular image-guided system. The Company manufactures and sells a suite of products in the United States and certain European markets. The Company’s products include Lightbox imaging console, as well as its Wildcat, Kittycat and the Ocelot family of catheters, which are designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion (CTO). The lumivascular platform offers real-time visualization of the inside of the artery during PAD treatment. The lumivascular platform consists of a capital component Lightbox and a range of disposable catheter products, including Ocelot, Ocelot PIXL, Ocelot MVRX and Pantheris.

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