Critical Contrast: CareDx (NASDAQ:CDNA) & Solventum (NYSE:SOLV)

Solventum (NYSE:SOLV) and CareDx (NASDAQ:CDNA) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.

Analyst Ratings

This is a summary of recent recommendations and price targets for Solventum and CareDx, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solventum	1	8	4	0	2.23
CareDx	0	5	4	0	2.44

Solventum presently has a consensus target price of $87.00, indicating a potential upside of 5.47%. CareDx has a consensus target price of $26.00, indicating a potential upside of 37.57%. Given CareDx’s stronger consensus rating and higher possible upside, analysts clearly believe CareDx is more favorable than Solventum.

Profitability

This table compares Solventum and CareDx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Solventum	18.13%	28.01%	7.17%
CareDx	19.65%	20.15%	15.15%

Earnings and Valuation

This table compares Solventum and CareDx”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solventum	$8.25 billion	1.73	$478.00 million	$8.68	9.50
CareDx	$333.79 million	2.91	$52.55 million	$1.19	15.88

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

Risk and Volatility

Solventum has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, CareDx has a beta of 2.54, meaning that its stock price is 154% more volatile than the S&P 500.

Summary

CareDx beats Solventum on 7 of the 11 factors compared between the two stocks.

About Solventum

Solventum Corporation, a healthcare company, engages in the developing, manufacturing, and commercializing a portfolio of solutions to address critical customer and patient needs. It operates through four segments: Medsurg, Dental Solutions, Health Information Systems, and Purification and Filtration. The Medsurg segment is a provider of solutions including advanced wound care, I.V. site management, sterilization assurance, temperature management, surgical supplies, stethoscopes, and medical electrodes. The Dental Solutions segment provides a comprehensive suite of dental and orthodontic products including brackets, aligners, restorative cements, and bonding agents. The Health Information Systems provides software solutions including computer-assisted, physician documentation, direct-to-bill and coding automation, classification methodologies, speech, recognition, and data visualization platforms. The Purification and Filtration segment provides purification and filtration technologies including filters, purifiers, cartridges, and membranes. The company was incorporated in 2023 and is based in Saint Paul, Minnesota.

About CareDx

CareDx, Inc. engages in the discovery, development, and commercialization of diagnostic solutions for transplant patients and caregivers in the United States and internationally. It also provides AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients; AlloMap Heart, a gene expression solution for heart transplant patients; AlloSure Heart, a dd-cfDNA solution for heart transplant patients; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. The company offers Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence specific primer technology; QTYPE that enables precision in HLA typing; and Ottr, a transplant patient management software. In addition, it provides AlloSeq Tx, a high-resolution HLA typing solution; AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood; AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients; Allocell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy transplants; and XynQAPI cloud-based transplant quality management software, as well as AlloCare, a mobile app that offers a patient-centric resource for transplant recipients. The company offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina, Inc. for the distribution, development, and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss. The company was formerly known as XDx, Inc. and changed its name to CareDx, Inc. in March 2014. The company was incorporated in 1998 and is headquartered in South San Francisco, California.