NeuroPace (NASDAQ:NPCE – Get Free Report) and AVANOS MEDICAL (NYSE:AVNS – Get Free Report) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.
Risk & Volatility
NeuroPace has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500. Comparatively, AVANOS MEDICAL has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.
Insider and Institutional Ownership
78.8% of NeuroPace shares are owned by institutional investors. Comparatively, 95.2% of AVANOS MEDICAL shares are owned by institutional investors. 20.5% of NeuroPace shares are owned by insiders. Comparatively, 2.6% of AVANOS MEDICAL shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NeuroPace | $79.91 million | 4.34 | -$27.14 million | ($0.84) | -12.48 |
| AVANOS MEDICAL | $687.80 million | 0.73 | -$392.10 million | ($10.07) | -1.08 |
NeuroPace has higher earnings, but lower revenue than AVANOS MEDICAL. NeuroPace is trading at a lower price-to-earnings ratio than AVANOS MEDICAL, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares NeuroPace and AVANOS MEDICAL’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NeuroPace | -29.29% | -168.61% | -25.48% |
| AVANOS MEDICAL | -66.89% | 6.16% | 4.57% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for NeuroPace and AVANOS MEDICAL, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NeuroPace | 1 | 1 | 5 | 0 | 2.57 |
| AVANOS MEDICAL | 1 | 1 | 0 | 0 | 1.50 |
NeuroPace currently has a consensus price target of $16.60, suggesting a potential upside of 58.40%. Given NeuroPace’s stronger consensus rating and higher possible upside, equities research analysts plainly believe NeuroPace is more favorable than AVANOS MEDICAL.
Summary
NeuroPace beats AVANOS MEDICAL on 9 of the 14 factors compared between the two stocks.
About NeuroPace
NeuroPace, Inc. operates as a medical device company in the United States. The company develops RNS system, a brain-responsive neuromodulation system that delivers personalized, real-time treatment at the seizure source for treating medically refractory focal epilepsy. It also records continuous brain activity data and enables clinicians to monitor patients in person and remotely. Its RNS System includes RNS neurostimulator, cortical strip and depth leads, and Patient Remote Monitor, as well as other implantable and non-implantable accessories. The company sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures. NeuroPace, Inc. was incorporated in 1997 and is headquartered in Mountain View, California.
About AVANOS MEDICAL
Avanos Medical, Inc., a medical technology company, offers medical device solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It offers a portfolio of chronic care products that include digestive health products, such as Mic-Key enteral feeding tubes, Corpak patient feeding solutions, and NeoMed neonatal and pediatric feeding solutions. The company also provides a portfolio of non-opioid pain solutions, including surgical pain and recovery products, such as ON-Q and ambIT surgical pain pumps, Game Ready cold, and compression therapy systems. In addition, it offers interventional pain solutions, which offers minimally invasive pain-relieving therapies, such as Coolief pain relief therapy; OrthogenRx's knee osteoarthritis hyaluronic acid pain relief injection products; and Trident radiofrequency ablation products to treat chronic pain conditions. It markets its products directly to hospitals and other healthcare providers, healthcare facilities, and other end-user customers, as well as through third-party wholesale distributors. The company was formerly known as Halyard Health, Inc. and changed its name to Avanos Medical, Inc. in June 2018. Avanos Medical, Inc. was incorporated in 2014 and is headquartered in Alpharetta, Georgia.
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