Syneron Medical (NASDAQ: ELOS) and Align Technology (NASDAQ:ALGN) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitabiliy, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Syneron Medical and Align Technology’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Syneron Medical $296.29 million 1.30 $13.40 million ($0.12) -91.66
Align Technology $1.15 billion 11.08 $284.34 million $2.69 58.99

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Syneron Medical and Align Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Syneron Medical 0 2 1 0 2.33
Align Technology 0 0 7 0 3.00

Syneron Medical currently has a consensus target price of $10.60, suggesting a potential downside of 3.64%. Align Technology has a consensus target price of $176.71, suggesting a potential upside of 11.36%. Given Align Technology’s stronger consensus rating and higher probable upside, analysts clearly believe Align Technology is more favorable than Syneron Medical.

Profitability

This table compares Syneron Medical and Align Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Syneron Medical -1.40% -0.77% -0.58%
Align Technology 18.98% 22.95% 16.47%

Insider & Institutional Ownership

69.2% of Syneron Medical shares are held by institutional investors. Comparatively, 87.9% of Align Technology shares are held by institutional investors. 2.0% of Align Technology shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Syneron Medical has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Align Technology has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500.

Summary

Align Technology beats Syneron Medical on 13 of the 13 factors compared between the two stocks.

Syneron Medical Company Profile

Syneron Medical Ltd. is engaged in the manufacture, research, development, marketing and sale of equipment for the aesthetic medical industry and systems for dermatologists, plastic surgeons and other qualified practitioners. The Company’s aesthetic medical products are based on its various technologies, including Electro-Optical Synergy (ELOS) technology, which uses the synergy between electrical energy, including radiofrequency (RF) energy, and optical energy to provide aesthetic medical treatments. The Company’s products target a range of non-invasive aesthetic medical procedures, including hair removal, wrinkle reduction, tattoo removal, rejuvenation of the skin’s appearance through the treatment of superficial benign vascular and pigmented lesions, acne treatment, treatment of leg veins, treatment for the temporary reduction in the appearance of cellulite and thigh circumference, ablation and resurfacing of the skin, and laser-assisted lipolysis.

Align Technology Company Profile

Align Technology, Inc. designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design/computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics and dental records storage. The Company operates through two segments: Clear Aligner segment and Scanner and Services (Scanner) segment. The Clear Aligner segment consists of its Invisalign System, which includes Invisalign Full, Teen and Assist (Comprehensive Products), Express/Lite (Non-Comprehensive Products) and Vivera Retainers, along with its training and ancillary products for treating malocclusion (Non-Case). The Scanner segment consists of intra-oral scanning systems and other services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. The Scanner segment includes its iTero scanner and OrthoCAD services.

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