Contrasting LENSAR (NASDAQ:LNSR) & Neuronetics (NASDAQ:STIM)

Neuronetics (NASDAQ:STIM) and LENSAR (NASDAQ:LNSR) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares Neuronetics and LENSAR”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neuronetics	$74.89 million	1.91	-$43.71 million	($0.82)	-2.55
LENSAR	$59.14 million	2.57	-$31.40 million	($4.39)	-2.90

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

Profitability

This table compares Neuronetics and LENSAR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neuronetics	-33.88%	-131.15%	-31.26%
LENSAR	-87.12%	N/A	-73.64%

Risk and Volatility

Neuronetics has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, LENSAR has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Neuronetics and LENSAR, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neuronetics	1	0	1	0	2.00
LENSAR	1	2	0	0	1.67

Neuronetics currently has a consensus target price of $7.00, indicating a potential upside of 234.93%. LENSAR has a consensus target price of $15.00, indicating a potential upside of 17.83%. Given Neuronetics’ stronger consensus rating and higher possible upside, equities analysts plainly believe Neuronetics is more favorable than LENSAR.

Institutional & Insider Ownership

53.6% of Neuronetics shares are held by institutional investors. Comparatively, 40.2% of LENSAR shares are held by institutional investors. 8.7% of Neuronetics shares are held by company insiders. Comparatively, 66.0% of LENSAR shares are held by company 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

Neuronetics beats LENSAR on 9 of the 14 factors compared between the two stocks.

About Neuronetics

Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with neurohealth disorders in the United States and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrists. The company was incorporated in 2001 and is headquartered in Malvern, Pennsylvania.

About LENSAR

LENSAR, Inc., a commercial-stage medical device company, focuses on designing, developing, and marketing a femtosecond laser system for the treatment of cataracts and the management of pre-existing or surgically induced corneal astigmatism. It offers LENSAR Laser System that incorporates a range of proprietary technologies designed to assist the surgeon in obtaining visual outcomes, efficiency, and reproducibility by providing imaging, procedure planning, design, and precision. The company also offers ALLY Adaptive Cataract Treatment System, a platform design to femtosecond laser technology features that enhanced laser capabilities into a single small unit that allows surgeons to perform a femtosecond laser assisted cataract procedure in a single operating room. LENSAR, Inc. was incorporated in 2004 and is headquartered in Orlando, Florida.