Analyzing DarioHealth (NASDAQ:DRIO) and Spectral AI (NASDAQ:MDAI)

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

Profitability

This table compares Spectral AI and DarioHealth’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectral AI	-70.64%	N/A	-27.57%
DarioHealth	-171.09%	-59.47%	-36.75%

Institutional and Insider Ownership

67.1% of Spectral AI shares are owned by institutional investors. Comparatively, 33.4% of DarioHealth shares are owned by institutional investors. 30.7% of Spectral AI shares are owned by insiders. Comparatively, 3.5% of DarioHealth shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Spectral AI and DarioHealth”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectral AI	$29.58 million	1.56	-$15.31 million	($0.74)	-2.03
DarioHealth	$27.04 million	2.94	-$42.75 million	($11.16)	-1.05

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Spectral AI and DarioHealth, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectral AI	1	0	2	0	2.33
DarioHealth	1	1	2	0	2.25

Spectral AI presently has a consensus price target of $3.25, suggesting a potential upside of 116.67%. DarioHealth has a consensus price target of $38.00, suggesting a potential upside of 223.02%. Given DarioHealth’s higher possible upside, analysts plainly believe DarioHealth is more favorable than Spectral AI.

Risk & Volatility

Spectral AI has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, DarioHealth has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.

Summary

Spectral AI beats DarioHealth on 9 of the 13 factors compared between the two stocks.

About Spectral AI

Spectral AI, Inc., an artificial intelligence (AI) company, focuses on developing predictive medical diagnostics in the United States. The company develops medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView System, a predictive analytics platform integrated with the predictive AI-Burn, which combines AI algorithms and multispectral imaging (MSI) imaging for an assessment of wound healing potential and offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention; and DeepView SnapShot M, a handheld, portable, and wireless diagnostic tool, that provides a potential enhanced and expanded use for the government and emergency care, first responders, and potentially home health care professionals. The company is headquartered in Dallas, Texas.

About DarioHealth

DarioHealth Corp. operates as a digital health company in the United States, Canada, the European Union, Australia, and New Zealand. Its digital therapeutics platform and suite of solutions deliver personalized and dynamic interventions driven by data analytics and one-on-one coaching for diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health. The company offers Dario Evolve, a metabolic solution to address metabolic health needs, such as diabetes, pre-diabetes, hypertension, and weight management; Dario Move, which address most common musculoskeletal conditions; Dario Elevate, a behavioral health solution that optimizes access to evidence-based care; and Dario One, a full suite of chronic condition management solution; and Dario blood glucose monitoring systems. It also provides native devices, such as glucose meter, blood pressure cuff, digital scale, and biofeedback sensor device, as well as live coaching services. The company was formerly known as LabStyle Innovations Corp. and changed its name to DarioHealth Corp. in July 2016. DarioHealth Corp. was incorporated in 2011 and is based in New York, New York.