ABIOMED (NASDAQ: ABMD) and IRIDEX Corporation (NASDAQ:IRIX) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Risk & Volatility

ABIOMED has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500. Comparatively, IRIDEX Corporation has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for ABIOMED and IRIDEX Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ABIOMED 0 2 6 0 2.75
IRIDEX Corporation 0 0 1 0 3.00

ABIOMED presently has a consensus target price of $180.43, indicating a potential downside of 7.57%. IRIDEX Corporation has a consensus target price of $13.00, indicating a potential upside of 60.10%. Given IRIDEX Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe IRIDEX Corporation is more favorable than ABIOMED.

Profitability

This table compares ABIOMED and IRIDEX Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ABIOMED 18.27% 13.89% 11.83%
IRIDEX Corporation -42.22% -23.21% -19.03%

Valuation and Earnings

This table compares ABIOMED and IRIDEX Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
ABIOMED $445.30 million 19.39 $52.11 million $2.03 96.16
IRIDEX Corporation $46.16 million 2.04 -$11.71 million ($1.71) -4.75

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

Institutional & Insider Ownership

90.5% of ABIOMED shares are held by institutional investors. Comparatively, 48.2% of IRIDEX Corporation shares are held by institutional investors. 7.0% of ABIOMED shares are held by insiders. Comparatively, 5.0% of IRIDEX Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

ABIOMED beats IRIDEX Corporation on 10 of the 13 factors compared between the two stocks.

ABIOMED Company Profile

ABIOMED, Inc. is a provider of temporary percutaneous mechanical circulatory support devices. The Company offers care to heart failure patients. The Company operates in the segment of the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company develops, manufactures and markets products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily performing the pumping function of the heart. The Company’s product portfolio includes the Impella 2.5, Impella CP, Impella RP, Impella LD, Impella 5.0 and AB5000. The Company’s products are used in the cardiac catheterization lab (cath lab), by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by heart surgeons.

IRIDEX Corporation Company Profile

IRIDEX Corporation is a provider of therapeutic based laser consoles, delivery devices and consumable instrumentation used to treat sight-threatening eye diseases in ophthalmology. The Company operates through ophthalmology segment. Its ophthalmology products consist of laser consoles, delivery devices and consumable instrumentation, including laser probes, and are used in the treatment of serious eye diseases, including the over three causes of irreversible blindness, such as diabetic retinopathy, glaucoma and age-related macular degeneration (AMD). In addition, the Company’s ophthalmology products are often used in vitrectomy procedures (used to treat proliferative diabetic retinopathy, macular holes, retinal tears and detachments), which are generally performed in the operating room and require a consumable single use intraocular laser probe (EndoProbe) to deliver light to the back of the eye together with other instrumentation.

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