Intersect ENT (NASDAQ: XENT) and AtriCure (NASDAQ:ATRC) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Risk & Volatility

Intersect ENT has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, AtriCure has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Profitability

This table compares Intersect ENT and AtriCure’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Intersect ENT -22.94% -17.60% -15.64%
AtriCure -19.56% -19.56% -11.91%

Valuation & Earnings

This table compares Intersect ENT and AtriCure’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Intersect ENT $87.16 million 10.18 -$19.71 million ($0.70) -43.43
AtriCure $166.00 million 4.72 -$19.62 million ($1.01) -22.57

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

Analyst Ratings

This is a breakdown of recent ratings for Intersect ENT and AtriCure, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intersect ENT 0 2 7 0 2.78
AtriCure 0 1 6 0 2.86

Intersect ENT presently has a consensus price target of $23.13, suggesting a potential downside of 23.93%. AtriCure has a consensus price target of $24.83, suggesting a potential upside of 8.92%. Given AtriCure’s stronger consensus rating and higher probable upside, analysts clearly believe AtriCure is more favorable than Intersect ENT.

Institutional and Insider Ownership

76.1% of Intersect ENT shares are owned by institutional investors. Comparatively, 84.9% of AtriCure shares are owned by institutional investors. 13.7% of Intersect ENT shares are owned by insiders. Comparatively, 10.0% of AtriCure shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

AtriCure beats Intersect ENT on 8 of the 13 factors compared between the two stocks.

Intersect ENT Company Profile

Intersect ENT, Inc. is a commercial-stage drug-device company. The Company develops drugs for patients with ear, nose and throat (ENT) conditions. The Company has developed a drug releasing bioabsorbable implant technology that enables targeted and sustained release of therapeutic agents. This targeted drug delivery technology is designed to allow ENT physicians to manage patient care. The Company’s commercial products are the PROPEL and PROPEL mini drug-releasing implants for patients undergoing sinus surgery to treat chronic sinusitis. The Company is building a portfolio of products based on its drug releasing bio-absorbable implant technology that are designed to provide localized drug delivery to treat patients across the continuum of care in chronic sinusitis. The Company markets PROPEL, which is indicated for use following ethmoid sinus surgery, and PROPEL Mini, which is indicated for use following ethmoid and/or frontal sinus surgery.

AtriCure Company Profile

AtriCure, Inc. is an atrial fibrillation (Afib) solutions company. The Company develops, manufactures, and sells devices designed primarily for the surgical ablation of cardiac tissue and systems designed for the exclusion of the left atrial appendage. It has various product lines for the ablation of cardiac tissue, including its Isolator Synergy Ablation System, for the treatment of persistent and longstanding persistent forms of Afib in patients undergoing certain open concomitant procedures. It has two primary product lines for cardiac tissue ablation, which include Radio Frequency Ablation Devices and cryoICE Cryoablation System, and a product line for left atrial appendage exclusion. The Company also sells Lumitip dissectors and the Estech line of reusable cardiac surgery (valve) instruments. Its cryoICE cryosurgery product line offers various cryoablation devices. Its AtriClip Left Atrial Appendage Exclusion System is designed to occlude the heart’s left atrial appendage (LAA).

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