Head to Head Comparison: Surmodics (NASDAQ:SRDX) vs. Neuronetics (NASDAQ:STIM)

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Neuronetics and Surmodics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neuronetics	0	1	3	0	2.75
Surmodics	0	4	0	0	2.00

Neuronetics currently has a consensus price target of $4.67, indicating a potential upside of 20.90%. Surmodics has a consensus price target of $50.00, indicating a potential upside of 44.43%. Given Surmodics’ higher probable upside, analysts clearly believe Surmodics is more favorable than Neuronetics.

Insider & Institutional Ownership

53.6% of Neuronetics shares are owned by institutional investors. Comparatively, 96.6% of Surmodics shares are owned by institutional investors. 9.8% of Neuronetics shares are owned by insiders. Comparatively, 8.9% of Surmodics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Neuronetics and Surmodics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neuronetics	$72.71 million	1.61	-$30.19 million	($1.23)	-3.14
Surmodics	$126.08 million	3.93	-$11.54 million	($1.01)	-34.28

Surmodics has higher revenue and earnings than Neuronetics. Surmodics 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 Surmodics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neuronetics	-50.09%	-141.24%	-32.77%
Surmodics	-11.48%	-4.39%	-2.95%

Risk & Volatility

Neuronetics has a beta of 2.17, meaning that its share price is 117% more volatile than the S&P 500. Comparatively, Surmodics has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Summary

Surmodics beats Neuronetics 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 Surmodics

Surmodics, Inc., together with its subsidiaries, provides performance coating technologies for intravascular medical devices, and chemical and biological components for in vitro diagnostic immunoassay tests and microarrays in the United States and internationally. It operates through two segments, Medical Device and In Vitro Diagnostics (IVD). The Medical Device segment engages in the provision of surface modification coating technologies to enhance access, deliverability, and predictable deployment of medical devices; and drug-delivery coating technologies to provide site-specific drug-delivery from the surface of a medical device for neurovascular, peripheral, coronary, and structural heart, and other markets, as well as manufacturing of vascular intervention medical devices, including drug-coated balloons, mechanical thrombectomy devices, and radial access balloon catheters and guide sheaths. The IVD segment develops, manufactures, and sells chemical and biological components for in vitro diagnostic immunoassay and molecular tests, as well as diagnostic and biomedical research markets. This segment offers protein stabilizers, substrates, surface coatings, and antigens. The company was founded in 1979 and is headquartered in Eden Prairie, Minnesota.