Critical Analysis: GenMark Diagnostics (GNMK) vs. Alliance HealthCare Services (AIQ)

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

Volatility & Risk

GenMark Diagnostics has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Alliance HealthCare Services has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for GenMark Diagnostics and Alliance HealthCare Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GenMark Diagnostics 0 1 5 0 2.83
Alliance HealthCare Services 0 0 0 0 N/A

GenMark Diagnostics presently has a consensus price target of $11.80, indicating a potential upside of 158.77%. Given GenMark Diagnostics’ higher probable upside, equities analysts clearly believe GenMark Diagnostics is more favorable than Alliance HealthCare Services.

Earnings & Valuation

This table compares GenMark Diagnostics and Alliance HealthCare Services’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GenMark Diagnostics $49.27 million 5.07 -$50.60 million ($1.22) -3.74
Alliance HealthCare Services N/A N/A N/A ($0.16) -81.25

Alliance HealthCare Services has lower revenue, but higher earnings than GenMark Diagnostics. Alliance HealthCare Services 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 GenMark Diagnostics and Alliance HealthCare Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GenMark Diagnostics -116.76% -100.33% -57.22%
Alliance HealthCare Services 3.63% N/A 3.07%

Insider and Institutional Ownership

27.0% of Alliance HealthCare Services shares are held by institutional investors. 7.5% of GenMark Diagnostics shares are held by insiders. Comparatively, 54.8% of Alliance HealthCare Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Alliance HealthCare Services beats GenMark Diagnostics on 6 of the 10 factors compared between the two stocks.

About GenMark Diagnostics

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.

About Alliance HealthCare Services

Alliance HealthCare Services, Inc. (Alliance) is a provider of outsourced healthcare services to hospitals and providers. The Company operates through three segments: Radiology Division, Oncology Division and Interventional Healthcare Services Division. The radiology segment comprises diagnostic imaging services, including magnetic resonance imaging (MRI), positron emission tomography/computed tomography (PET/CT) and other imaging services. The radiology segment also comprises radiation oncology services. The interventional healthcare services segment provides interventional healthcare through therapeutic minimally invasive pain management procedures medical management, laboratory testing and other services. The Company operates freestanding outpatient radiology, oncology and interventional clinics, and Ambulatory Surgical Centers (ASC) that are not owned by hospitals or providers. It operates over 560 diagnostic imaging and radiation therapy systems.

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