Analyzing KORU Medical Systems (NASDAQ:KRMD) and Outset Medical (NASDAQ:OM)

Outset Medical (NASDAQ:OM) and KORU Medical Systems (NASDAQ:KRMD) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Outset Medical and KORU Medical Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outset Medical	1	1	2	1	2.60
KORU Medical Systems	1	1	3	1	2.67

Outset Medical presently has a consensus target price of $10.67, suggesting a potential upside of 137.04%. KORU Medical Systems has a consensus target price of $6.13, suggesting a potential upside of 24.49%. Given Outset Medical’s higher probable upside, equities research analysts clearly believe Outset Medical is more favorable than KORU Medical Systems.

Insider and Institutional Ownership

58.6% of KORU Medical Systems shares are held by institutional investors. 2.4% of Outset Medical shares are held by insiders. Comparatively, 20.6% of KORU Medical Systems shares are held by 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.

Volatility and Risk

Outset Medical has a beta of 2.08, indicating that its share price is 108% more volatile than the S&P 500. Comparatively, KORU Medical Systems has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500.

Earnings & Valuation

This table compares Outset Medical and KORU Medical Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outset Medical	$113.69 million	0.72	-$127.98 million	($13.05)	-0.34
KORU Medical Systems	$33.65 million	6.77	-$6.07 million	($0.08)	-61.50

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

Profitability

This table compares Outset Medical and KORU Medical Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Outset Medical	-73.12%	-71.37%	-30.11%
KORU Medical Systems	-9.49%	-22.43%	-13.86%

Summary

KORU Medical Systems beats Outset Medical on 10 of the 14 factors compared between the two stocks.

About Outset Medical

Outset Medical, Inc., a medical technology company, engages in the development of a hemodialysis system for hemodialysis in the United States. The company offers Tablo Hemodialysis System, a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings; and manufactures, supports, and distributes for Tablo console, Tablo cartridge, and other consumables. It also provides Tablo Data Ecosystem, including TabloHub, a customer-facing portal; MyTablo, a patient-facing portal; and TabloDash, an internal data analytics platform. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.

About KORU Medical Systems

KORU Medical Systems, Inc. develops and manufactures medical devices and supplies in the United States and internationally. It offers the freedom infusion systems to deliver life-saving therapies to patients with chronic illnesses, such as primary immunodeficiency diseases, chronic inflammatory demyelinating polyneuropathy, and paroxysmal nocturnal hemoglobinuria. Its products include the FREEDOM60 syringe infusion system, the FreedomEdge syringe driver, HIgH-Flo subcutaneous safety needle sets, and precision flow rate tubing products. The company was incorporated in 1980 and is based in Mahwah, New Jersey.