Financial Analysis: Fulgent Genetics (FLGT) versus Abaxis (ABAX)

Fulgent Genetics (NASDAQ: FLGT) and Abaxis (NASDAQ:ABAX) are both small-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.

Institutional and Insider Ownership

13.4% of Fulgent Genetics shares are held by institutional investors. Comparatively, 97.7% of Abaxis shares are held by institutional investors. 58.8% of Fulgent Genetics shares are held by company insiders. Comparatively, 4.3% of Abaxis shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Fulgent Genetics and Abaxis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fulgent Genetics 0 0 2 0 3.00
Abaxis 1 4 2 0 2.14

Fulgent Genetics presently has a consensus price target of $7.25, indicating a potential upside of 44.71%. Abaxis has a consensus price target of $49.63, indicating a potential downside of 18.86%. Given Fulgent Genetics’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Fulgent Genetics is more favorable than Abaxis.

Profitability

This table compares Fulgent Genetics and Abaxis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fulgent Genetics -0.36% 0.20% 0.18%
Abaxis 11.98% 10.18% 8.84%

Earnings & Valuation

This table compares Fulgent Genetics and Abaxis’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fulgent Genetics $18.27 million 4.89 -$5.34 million N/A N/A
Abaxis $227.22 million 6.11 $32.71 million $1.20 50.97

Abaxis has higher revenue and earnings than Fulgent Genetics.

Dividends

Abaxis pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. Fulgent Genetics does not pay a dividend. Abaxis pays out 53.3% of its earnings in the form of a dividend.

Summary

Abaxis beats Fulgent Genetics on 8 of the 13 factors compared between the two stocks.

About Fulgent Genetics

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.

About Abaxis

Abaxis, Inc. is a developer, manufacturer and marketer of portable blood analysis systems that are used in medical specialties in human or veterinary patient care to provide clinicians with blood constituent measurements. The Company markets and sells its products around the world through independent distributors and direct sales force. The Company’s segments are the medical market and the veterinary market. The Company’s medical market products include Piccolo chemistry analyzers and consumable products. The Company develops, manufactures and sells the Piccolo Xpress chemistry analyzer for use in human patient care to provide clinicians with blood constituent measurements. The Company’s veterinary market product offerings include VetScan chemistry analyzers and veterinary reagent discs, VetScan hematology instruments and related reagent kits, VetScan VSpro specialty analyzers and related consumables, VetScan i-STAT analyzers and related consumables and VetScan rapid tests.

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