Cerus (NASDAQ: CERS) and Second Sight Medical Products (NASDAQ:EYES) are both small-cap healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Cerus and Second Sight Medical Products, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerus 0 0 4 0 3.00
Second Sight Medical Products 0 0 1 0 3.00

Cerus currently has a consensus target price of $7.00, suggesting a potential upside of 134.11%. Second Sight Medical Products has a consensus target price of $5.00, suggesting a potential upside of 338.60%. Given Second Sight Medical Products’ higher probable upside, analysts clearly believe Second Sight Medical Products is more favorable than Cerus.

Institutional and Insider Ownership

58.4% of Cerus shares are held by institutional investors. Comparatively, 13.1% of Second Sight Medical Products shares are held by institutional investors. 7.4% of Cerus shares are held by company insiders. Comparatively, 34.7% of Second Sight Medical Products shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Cerus and Second Sight Medical Products’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cerus $36.83 million 8.86 -$61.75 million ($0.61) -4.90
Second Sight Medical Products $5.14 million 12.60 -$32.85 million ($0.72) -1.58

Second Sight Medical Products has higher revenue, but lower earnings than Cerus. Cerus is trading at a lower price-to-earnings ratio than Second Sight Medical Products, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Cerus has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500. Comparatively, Second Sight Medical Products has a beta of 3.64, indicating that its share price is 264% more volatile than the S&P 500.

Profitability

This table compares Cerus and Second Sight Medical Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cerus -152.64% -169.65% -81.36%
Second Sight Medical Products -646.89% -168.49% -129.48%

About Cerus

Cerus Corporation is a biomedical products company. The Company is engaged in developing and commercializing the INTERCEPT Blood System for blood safety. The Company operates through blood safety segment. The Company’s INTERCEPT Blood System is based on its technology for controlling biological replication, and is designed to reduce blood-borne pathogens in donated blood components intended for transfusion. The Company’s INTERCEPT Blood System is designed to target and inactivate blood-borne pathogens, such as viruses, including human immunodeficiency virus (HIV), West Nile, Severe acute respiratory syndrome (SARS), hepatitis B and C; bacteria and parasites, as well as harmful white blood cells, while preserving the therapeutic properties of platelet, plasma and red blood cell transfusion products. The Company’s INTERCEPT Blood System is for use with blood components, including plasma, platelets, and red blood cells.

About Second Sight Medical Products

Second Sight Medical Products, Inc. is engaged in developing, manufacturing and marketing prosthetic devices that restore vision to blind individuals. The Company’s product, the Argus II System, treats outer retinal degenerations, such as retinitis pigmentosa (RP). The Argus II System provides an artificial form of vision that differs from the vision of people with normal sight. It does not restore normal vision and it does not slow or reverse the progression of the disease. The Company’s Argus II System employs electrical stimulation to bypass degenerated photoreceptor cells and to stimulate remaining viable retinal cells thereby inducing visual perception in blind individuals. The Argus II System works by converting video images captured by a miniature camera housed in a patient’s glasses into a series of small electrical pulses that are transmitted wirelessly to an array of electrodes that are implanted on the surface of the retina.

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