Critical Review: STERIS (NYSE:STE) versus LENSAR (NASDAQ:LNSR)

LENSAR (NASDAQ:LNSR) and STERIS (NYSE:STE) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for LENSAR and STERIS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LENSAR	1	2	0	0	1.67
STERIS	0	2	6	0	2.75

LENSAR currently has a consensus price target of $15.00, indicating a potential upside of 28.31%. STERIS has a consensus price target of $275.20, indicating a potential upside of 23.97%. Given LENSAR’s higher possible upside, equities analysts plainly believe LENSAR is more favorable than STERIS.

Profitability

This table compares LENSAR and STERIS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LENSAR	-87.12%	N/A	-73.64%
STERIS	12.15%	14.34%	9.58%

Volatility & Risk

LENSAR has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, STERIS has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Earnings & Valuation

This table compares LENSAR and STERIS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LENSAR	$53.49 million	2.61	-$31.40 million	($4.39)	-2.66
STERIS	$5.46 billion	3.99	$614.64 million	$7.17	30.96

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

Institutional and Insider Ownership

40.2% of LENSAR shares are owned by institutional investors. Comparatively, 94.7% of STERIS shares are owned by institutional investors. 66.0% of LENSAR shares are owned by insiders. Comparatively, 1.1% of STERIS shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

STERIS beats LENSAR on 12 of the 14 factors compared between the two stocks.

About LENSAR

LENSAR, Inc., a commercial-stage medical device company, focuses on designing, developing, and marketing a femtosecond laser system for the treatment of cataracts and the management of pre-existing or surgically induced corneal astigmatism. It offers LENSAR Laser System that incorporates a range of proprietary technologies designed to assist the surgeon in obtaining visual outcomes, efficiency, and reproducibility by providing imaging, procedure planning, design, and precision. The company also offers ALLY Adaptive Cataract Treatment System, a platform design to femtosecond laser technology features that enhanced laser capabilities into a single small unit that allows surgeons to perform a femtosecond laser assisted cataract procedure in a single operating room. LENSAR, Inc. was incorporated in 2004 and is headquartered in Orlando, Florida.

About STERIS

STERIS plc provides infection prevention products and services worldwide. It operates through four segments: Healthcare, Applied Sterilization Technologies, Life Sciences, and Dental. The Healthcare segment offers cleaning chemistries and sterility assurance products; automated endoscope reprocessing system and tracking products; endoscopy accessories, washers, sterilizers, and other pieces of capital equipment for the operation of a sterile processing department; and equipment used directly in the operating room, including surgical tables, lights, and connectivity solutions, as well as equipment management services. It also provides capital equipment installation, maintenance, upgradation, repair, and troubleshooting services; preventive maintenance programs and repair services; instrument and endoscope repair and maintenance services; and custom process improvement consulting and outsourced instrument sterile processing services. The Applied Sterilization Technologies segment provides contract sterilization and testing services for medical device and pharmaceutical manufacturers through a network of approximately 50 contract sterilization and laboratory facilities. The Life Sciences segment designs, manufactures and sells consumable products, such as formulated cleaning chemistries, barrier, sterility assurance products, steam and vaporized hydrogen peroxide sterilizers, and washer disinfectors. This segment also offers equipment installation, maintenance, upgradation, repair, and troubleshooting services; and preventive maintenance programs and repair services. The Dental segment provides hand and electric-powered dental instruments, infection control products, conscious sedation, personal protective equipment, and water quality products for dental suite. The company serves its products and services to hospitals, other healthcare providers, and pharmaceutical manufacturers. The company was founded in 1985 and is based in Dublin, Ireland.