Obalon Therptcs (NASDAQ: OBLN) and ConforMIS (NASDAQ:CFMS) are both small-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

41.7% of Obalon Therptcs shares are held by institutional investors. Comparatively, 38.6% of ConforMIS shares are held by institutional investors. 16.4% of Obalon Therptcs shares are held by insiders. Comparatively, 9.6% of ConforMIS shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Obalon Therptcs and ConforMIS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Obalon Therptcs -566.87% -108.07% -48.50%
ConforMIS -72.87% -66.61% -49.87%

Valuation and Earnings

This table compares Obalon Therptcs and ConforMIS’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Obalon Therptcs $4.98 million 30.74 -$27.12 million ($6.90) -1.32
ConforMIS $79.26 million 1.92 -$54.78 million ($1.36) -2.50

Obalon Therptcs has higher revenue, but lower earnings than ConforMIS. ConforMIS is trading at a lower price-to-earnings ratio than Obalon Therptcs, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Obalon Therptcs and ConforMIS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Obalon Therptcs 1 0 3 0 2.50
ConforMIS 0 4 3 0 2.43

Obalon Therptcs currently has a consensus target price of $15.25, indicating a potential upside of 67.58%. ConforMIS has a consensus target price of $8.25, indicating a potential upside of 142.65%. Given ConforMIS’s higher possible upside, analysts plainly believe ConforMIS is more favorable than Obalon Therptcs.

Summary

Obalon Therptcs beats ConforMIS on 6 of the 11 factors compared between the two stocks.

Obalon Therptcs Company Profile

Obalon Therapeutics, Inc. is a United States-based commercial-stage medical device company focused on developing and commercializing medical devices to treat obese and overweight people by facilitating weight loss. The Company’s product, Obalon balloon system, is a swallowable, gas-filled intragastric balloon designed to provide weight loss in obese patients. The Obalon balloon system is intended to be used as an adjunct to a moderate intensity diet and behavior modification program. All balloons must be removed six months after the first balloon is placed. The Obalon balloon system intends to provide patients and physicians with a reversible and repeatable weight loss solution in an outpatient setting, without altering patient anatomy or requiring surgery. The Company has received Premarket approval (PMA) for its Obalon balloon system based on the results of its United States pivotal clinical trial, referred to as the SMART trial.

ConforMIS Company Profile

ConforMIS, Inc. is a medical technology company. The Company uses its iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants, which are individually sized and shaped, to fit each patient’s anatomy. The Company’s iFit technology platform is applicable to various joints. It offers a line of customized knee implants designed to restore the natural shape of a patient’s knee. It offers iTotal CR, which is a total knee replacement implant. Its iFit technology platform consists of three elements, including iFit Design, its algorithms and computer software that is used to design customized implants and associated single-use patient-specific instrumentation referred to as iJigs, based on computed tomography scans of the patient and to prepare a surgical plan customized for the patient (iView); iFit Printing, which is a three-dimensional printing technology used to manufacture iJigs, and iFit Just-in-Time manufacturing and delivery capabilities.

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