Critical Review: RxSight (NASDAQ:RXST) & Edap Tms (NASDAQ:EDAP)

RxSight (NASDAQ:RXST) and Edap Tms (NASDAQ:EDAP) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Valuation & Earnings

This table compares RxSight and Edap Tms”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RxSight	$139.93 million	2.30	-$27.45 million	($0.88)	-8.89
Edap Tms	$69.18 million	2.16	-$20.58 million	($0.57)	-7.02

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

Risk & Volatility

RxSight has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Edap Tms has a beta of -0.16, indicating that its stock price is 116% less volatile than the S&P 500.

Insider & Institutional Ownership

78.8% of RxSight shares are owned by institutional investors. Comparatively, 62.7% of Edap Tms shares are owned by institutional investors. 9.6% of RxSight shares are owned by insiders. Comparatively, 0.2% of Edap Tms shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares RxSight and Edap Tms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RxSight	-25.15%	-12.82%	-11.44%
Edap Tms	-30.95%	-61.60%	-26.70%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for RxSight and Edap Tms, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RxSight	3	10	2	0	1.93
Edap Tms	1	2	1	0	2.00

RxSight currently has a consensus price target of $9.78, suggesting a potential upside of 25.04%. Edap Tms has a consensus price target of $8.50, suggesting a potential upside of 112.50%. Given Edap Tms’ stronger consensus rating and higher probable upside, analysts clearly believe Edap Tms is more favorable than RxSight.

Summary

RxSight beats Edap Tms on 9 of the 14 factors compared between the two stocks.

About RxSight

RxSight, Inc., a commercial-stage medical device company, engages in the research and development, manufacture, and sale of light adjustable intraocular lenses (LAL) used in cataract surgery in the United States and internationally. It offers RxSight system that enables doctors to customize and enhance the visual acuity for patients after cataract surgery. The company's RxSight system includes RxSight Light Adjustable Lens, a special photosensitive material that changes shape and power. RxSight light delivery device, an office-based light treatment device that delivers UV light in a programmed pattern to modify the LAL based on the visual correction needed to achieve desired vision after cataract surgery. It primarily serves cataract doctors. The company was formerly known as Calhoun Vision, Inc. and changed its name to RxSight, Inc. in February 2017. RxSight, Inc. was incorporated in 1997 and is headquartered in Aliso Viejo, California.

About Edap Tms

EDAP TMS SA is a holding company, which, through its subsidiary, engages in the development, production, and marketing of minimally invasive medical devices for urological diseases. It operates through the High Intensity Focused Ultrasound (HIFU) and Urology Devices and Services (UDS) segments. The HIFU segment develops, manufactures, and markets devices for the minimally invasive ablation of certain types of localized tumors using HIFU technology. The UDS segment focuses on the development, marketing, manufacturing, and servicing of medical devices for the minimally invasive diagnosis or treatment of urological disorders, mainly urinary stones, and other clinical indications. The company was founded on December 3, 1979 and is headquartered in Vaulx-en-Velin, France.