athenahealth (NASDAQ: ATHN) and Castlight Health, inc. (NYSE:CSLT) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitabiliy, valuation, risk, earnings and dividends.

Risk and Volatility

athenahealth has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500. Comparatively, Castlight Health, inc. has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.

Profitability

This table compares athenahealth and Castlight Health, inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
athenahealth 2.80% 6.91% 3.80%
Castlight Health, inc. -42.54% -44.33% -28.70%

Valuation & Earnings

This table compares athenahealth and Castlight Health, inc.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
athenahealth $1.15 billion 4.95 $127.70 million $0.80 178.16
Castlight Health, inc. $115.24 million 4.87 -$48.34 million ($0.45) -9.56

athenahealth has higher revenue and earnings than Castlight Health, inc.. Castlight Health, inc. is trading at a lower price-to-earnings ratio than athenahealth, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for athenahealth and Castlight Health, inc., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
athenahealth 2 10 12 0 2.42
Castlight Health, inc. 1 5 2 0 2.13

athenahealth presently has a consensus target price of $147.38, indicating a potential upside of 3.40%. Castlight Health, inc. has a consensus target price of $4.54, indicating a potential upside of 5.48%. Given Castlight Health, inc.’s higher possible upside, analysts clearly believe Castlight Health, inc. is more favorable than athenahealth.

Institutional & Insider Ownership

39.1% of Castlight Health, inc. shares are owned by institutional investors. 3.2% of athenahealth shares are owned by insiders. Comparatively, 24.4% of Castlight Health, inc. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

athenahealth beats Castlight Health, inc. on 10 of the 13 factors compared between the two stocks.

athenahealth Company Profile

athenahealth, Inc. provides network-based medical record, revenue cycle, patient engagement, care coordination and population health services. The Company also offers Epocrates and other point-of-care mobile applications. The Company delivers majority of its service offerings through a single instance of cloud-based software, athenaNet. The Company has a range of network-enabled services to support healthcare providers across the continuum of care. The Company offers various combinations of its services to its clients, including athenaOne and athenaOne for Hospitals and Health Systems, depending on whether they are medical groups and practices or hospitals and larger health systems. As of December 31, 2016, the Company connected care across a national network of approximately 88,000 providers and approximately 86 million patients. Its suite of network-enabled services includes athenaCollector, athenaClinicals, athenaCommunicator, athenaCoordinator, Population Health and Epocrates.

Castlight Health, inc. Company Profile

Castlight Health, Inc. offers a health benefits platform that engages employees to make healthcare decisions, and enables employers to communicate and measure their benefit programs. The Company operates through cloud-based products segment. Its technology offering aggregates data and applies analytics to make healthcare data transparent. Its products deliver employee engagement and enable employers to integrate benefit programs into a single platform available to employees and their families. Its health benefits platform engages external data and its substantial user base to provide a single, end-to-end solution that engages employees through personalized and relevant communications. Its offering provides employers the opportunity to communicate, measure, and get value out of their benefits and programs on a real-time basis. It offers cross-sell products, such as Castlight Action, Castlight Pharmacy, Castlight Dental, Castlight Elevate, Castlight Protect and Castlight Rewards.

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