Quidel Corporation (NASDAQ: QDEL) and GenMark Diagnostics (NASDAQ:GNMK) 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, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings for Quidel Corporation and GenMark Diagnostics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quidel Corporation 0 1 5 0 2.83
GenMark Diagnostics 0 0 5 0 3.00

Quidel Corporation currently has a consensus price target of $47.50, indicating a potential upside of 8.87%. GenMark Diagnostics has a consensus price target of $14.40, indicating a potential upside of 49.07%. Given GenMark Diagnostics’ stronger consensus rating and higher possible upside, analysts clearly believe GenMark Diagnostics is more favorable than Quidel Corporation.

Valuation & Earnings

This table compares Quidel Corporation and GenMark Diagnostics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Quidel Corporation $214.11 million 6.81 $39.38 million ($0.01) -4,358.64
GenMark Diagnostics $50.59 million 10.44 -$49.93 million ($1.21) -7.98

Quidel Corporation has higher revenue and earnings than GenMark Diagnostics. Quidel Corporation is trading at a lower price-to-earnings ratio than GenMark Diagnostics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Quidel Corporation and GenMark Diagnostics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quidel Corporation -0.03% -0.03% -0.02%
GenMark Diagnostics -111.96% -109.89% -60.26%

Risk and Volatility

Quidel Corporation has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, GenMark Diagnostics has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

87.2% of Quidel Corporation shares are owned by institutional investors. 22.0% of Quidel Corporation shares are owned by company insiders. Comparatively, 7.5% of GenMark Diagnostics shares are owned by company 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.

Summary

Quidel Corporation beats GenMark Diagnostics on 9 of the 12 factors compared between the two stocks.

Quidel Corporation Company Profile

Quidel Corporation is engaged in the development, manufacturing and marketing of diagnostic testing solutions. These diagnostic testing solutions are separated into four product categories: immunoassays, molecular assays, virology and specialty products. The Company sells its products directly to end users and distributors, in each case, for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, universities, retail clinics, pharmacies and wellness screening centers. Its diagnostic solutions aid in the detection and diagnosis of critical diseases and other medical conditions, including infectious diseases, women’s health, gastrointestinal diseases, autoimmune diseases, bone health and thyroid diseases. The Company provides diagnostic testing solutions under various brand names, including Quidel, QuickVue, QuickVue+, MicroVue, FreshCells, D3 FastPoint, Super E-Mix, ELVIS, Sofia, Quidel Molecular, Amplivue, Lyra and Thyretain.

GenMark Diagnostics Company Profile

GenMark Diagnostics, Inc. is a molecular diagnostics company. The Company is focused on developing and commercializing multiplex molecular tests that aid in the diagnosis of complex medical conditions. It develops and commercializes multiplex molecular tests based on its eSensor electrochemical detection technology. It offers four Food and Drug Administration (FDA)-cleared diagnostic tests which run on its XT-8 instrument; its Respiratory Viral Panel; its Cystic Fibrosis Genotyping Test; its Warfarin Sensitivity Test, and its Thrombophilia Risk Test. It also offers a Hepatitis C (HCV) genotyping test and associated custom manufactured reagents, as well as a 2C19 Genotyping Test, versions of which are available for use with its XT-8 instrument for research use only (RUO). Its XT-8 and ePlex test cartridges utilize the combination of distinct electrodes and multiple signal probes to detect dozens of target biomarkers from a single sample, thereby enabling highly multiplexed testing.

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