K2M Group Holdings (KTWO) & T2 Biosystems (NASDAQ:TTOO) Financial Analysis
K2M Group Holdings (NASDAQ: KTWO) and T2 Biosystems (NASDAQ:TTOO) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitabiliy, valuation, analyst recommendations and dividends.
This table compares K2M Group Holdings and T2 Biosystems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|K2M Group Holdings||-17.48%||-16.02%||-11.09%|
Insider and Institutional Ownership
98.7% of K2M Group Holdings shares are held by institutional investors. Comparatively, 66.7% of T2 Biosystems shares are held by institutional investors. 5.8% of K2M Group Holdings shares are held by insiders. Comparatively, 38.7% of T2 Biosystems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares K2M Group Holdings and T2 Biosystems’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|K2M Group Holdings||$242.21 million||4.34||-$4.21 million||($1.02)||-24.17|
|T2 Biosystems||$3.92 million||20.92||-$48.86 million||($2.04)||-1.31|
K2M Group Holdings has higher revenue and earnings than T2 Biosystems. K2M Group Holdings is trading at a lower price-to-earnings ratio than T2 Biosystems, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for K2M Group Holdings and T2 Biosystems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|K2M Group Holdings||0||0||8||0||3.00|
K2M Group Holdings currently has a consensus price target of $26.57, indicating a potential upside of 7.79%. T2 Biosystems has a consensus price target of $6.83, indicating a potential upside of 154.98%. Given T2 Biosystems’ higher possible upside, analysts plainly believe T2 Biosystems is more favorable than K2M Group Holdings.
Risk and Volatility
K2M Group Holdings has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, T2 Biosystems has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500.
K2M Group Holdings beats T2 Biosystems on 9 of the 13 factors compared between the two stocks.
About K2M Group Holdings
K2M Group Holdings, Inc. is a medical device company focused on designing, developing and commercializing spine and minimally invasive technologies and techniques. The Company’s solutions are focused on achieving three-dimensional Total Body Balance. Its spine products are used by spine surgeons to treat spinal pathologies, such as deformity (primarily scoliosis), trauma and tumor. Its products consist of implants, disposables and instruments, which are marketed and sold primarily to hospitals for use by spine surgeons. As of December 31, 2016, its product portfolio consisted of 83 product lines that are used in complex spine, minimally invasive surgery (MIS) and degenerative surgeries. Its technologies include EVEREST, MESA, Rail 4D, Quicket Deformity, CASCADIA, CAPRI, SERENGETI, RAVINE and tifix. Its degenerative spine technologies are used to treat degenerative spine disorders and include products, such as cervical, thoracic and lumbar spinal fusion devices and interbody devices.
About T2 Biosystems
T2 Biosystems, Inc. is an in vitro diagnostics company engaged in developing a technology platform offering an alternative to diagnostic methodologies. The Company’s T2 Magnetic Resonance platform (T2MR) enables detection of pathogens, biomarkers and other abnormalities in a range of unpurified patient sample types, including whole blood, plasma, serum, saliva, sputum and urine, and can detect cellular targets at limits of detection as one colony forming unit per milliliter (CFU/mL). The Company’s initial development efforts target sepsis, hemostasis and Lyme disease. T2MR is a miniaturized, magnetic resonance-based approach that measures how water molecules react in the presence of magnetic fields. Its platform detects a range of targets, including molecular targets, such as deoxyribonucleic acid (DNA), immunodiagnostics, such as proteins, and a range of hemostasis measurements. The Company offers T2Dx Instrument (T2Dx) and the T2Candida Panel.
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