Fulgent Genetic (NASDAQ: FLGT) and GenMark Diagnostics (NASDAQ:GNMK) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Analyst Recommendations

This is a summary of current recommendations for Fulgent Genetic and GenMark Diagnostics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fulgent Genetic 0 0 2 0 3.00
GenMark Diagnostics 0 0 5 0 3.00

Fulgent Genetic currently has a consensus price target of $8.50, indicating a potential upside of 122.51%. GenMark Diagnostics has a consensus price target of $14.40, indicating a potential upside of 89.97%. Given Fulgent Genetic’s higher possible upside, research analysts clearly believe Fulgent Genetic is more favorable than GenMark Diagnostics.

Profitability

This table compares Fulgent Genetic and GenMark Diagnostics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fulgent Genetic -0.42% -0.02% -0.02%
GenMark Diagnostics -111.96% -109.89% -60.26%

Institutional & Insider Ownership

16.8% of Fulgent Genetic shares are held by institutional investors. 58.8% of Fulgent Genetic shares are held by company insiders. Comparatively, 7.5% of GenMark Diagnostics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Fulgent Genetic and GenMark Diagnostics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fulgent Genetic $20.81 million 3.26 $2.17 million ($0.38) -10.05
GenMark Diagnostics $50.59 million 8.19 -$49.93 million ($1.21) -6.26

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

Summary

Fulgent Genetic beats GenMark Diagnostics on 8 of the 11 factors compared between the two stocks.

Fulgent Genetic Company Profile

Fulgent Genetics, Inc. is a technology company. The Company offers genetic testing to provide physicians with clinically actionable diagnostic information to improve quality of patient care. The Company has developed a technology platform that integrates data comparison and suppression algorithms, adaptive learning software, advanced genetic diagnostics tools and integrated laboratory processes. As of December 31, 2015, the Company’s test menu includes approximately 18,000 single-gene tests and over 200 pre-established, multi-gene, disease-specific panels that collectively test for approximately 7,500 genetic conditions, including various cancers, cardiovascular diseases and neurological disorders. The Company’s gene probes are specifically engineered to generate genetic data that is optimized for its software, which enables to rapidly incorporate new genes into its test menu, develop new panels of disease-specific tests and customize tests for its customers.

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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