Contrasting NeuroPace (NASDAQ:NPCE) and Paragon 28 (NYSE:FNA)

NeuroPace (NASDAQ:NPCE – Get Rating) and Paragon 28 (NYSE:FNA – Get Rating) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Risk & Volatility

NeuroPace has a beta of 2.61, suggesting that its stock price is 161% more volatile than the S&P 500. Comparatively, Paragon 28 has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for NeuroPace and Paragon 28, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NeuroPace	1	0	2	0	2.33
Paragon 28	0	0	3	0	3.00

NeuroPace presently has a consensus price target of $9.17, suggesting a potential upside of 165.70%. Paragon 28 has a consensus price target of $28.60, suggesting a potential upside of 63.90%. Given NeuroPace’s higher possible upside, analysts plainly believe NeuroPace is more favorable than Paragon 28.

Earnings and Valuation

This table compares NeuroPace and Paragon 28’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NeuroPace	$45.52 million	1.90	-$47.08 million	($1.92)	-1.80
Paragon 28	$181.38 million	8.49	-$67.33 million	($0.89)	-19.61

NeuroPace has higher earnings, but lower revenue than Paragon 28. Paragon 28 is trading at a lower price-to-earnings ratio than NeuroPace, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

90.7% of NeuroPace shares are owned by institutional investors. Comparatively, 21.9% of Paragon 28 shares are owned by institutional investors. 10.4% of NeuroPace shares are owned by company insiders. Comparatively, 19.5% of Paragon 28 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares NeuroPace and Paragon 28’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NeuroPace	-103.43%	-97.12%	-39.06%
Paragon 28	-37.12%	-39.97%	-25.77%

Summary

Paragon 28 beats NeuroPace on 9 of the 14 factors compared between the two stocks.

About NeuroPace

(Get Rating)

NeuroPace, Inc. operates as a medical device company in the United States. It develops and sells RNS system, a brain-responsive neuromodulation system for treating medically refractory focal epilepsy by delivering personalized real-time treatment at the seizure source. The company's RNS system also records continuous brain activity data; and enables clinicians to monitor patients in person and remotely. It sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures. The company was incorporated in 1997 and is headquartered in Mountain View, California.

About Paragon 28

(Get Rating)

Paragon 28, Inc. designs, develops, distributes, and sells foot and ankle surgical systems in the United States and internationally. It offers plating systems, including gorilla plating systems, such as lisfranc, lapidus, lateral column, calcaneus slide, and naviculocuneiform (NC) fusion plating systems; baby gorilla plate-specific screws, navicular fracture plates, and 5th metatarsal hook plates; and silverback plating systems. The company also provides precision guide technology for various procedures consisting of fusion, a procedure to address bunion deformities that fuses two bones on the big toe; first tarsometatarsal arthrodesis; and metatarsal osteotomy for bunion correction, medial column beaming for charcot foot reconstruction, ankle fusion plating, and NC joint arthrodesis. In addition, it offers monster, mini monster, and joust beaming screw systems for use in bone reconstruction, osteotomy, arthrodesis, joint fusion, ligament fixation, fracture repair, and fracture fixation; and APEX 3D total ankle replacement systems; total talus spacers to replace the talus and bone in the ankle that connects the leg and foot. Further, the company provides bunion or hallux valgus correction systems, including nail systems phantom intramedullary nail systems for the treatment of severe hallux valgus; and various orthobiologics comprising bone wedges, grafts, demineralized bone matrices, bone void fillers, synthetic materials, amniotic products, and a biocompatible collagen matrix, as well as PRESERVE bone graft systems for homologous application. Additionally, it offers soft tissue fixation systems, titanium sprayed polyetheretherketone implants, nitinol staple systems, stabilization systems, and curved instruments. The company serves hospitals and ambulatory surgery centers through a network of sales representatives and stocking distributors. Paragon 28, Inc. was founded in 2010 and is headquartered in Englewood, Colorado.