Natus Medical (NASDAQ:NTUS) and Cutera (NASDAQ:CUTR) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Insider and Institutional Ownership

91.9% of Natus Medical shares are owned by institutional investors. Comparatively, 93.0% of Cutera shares are owned by institutional investors. 1.7% of Natus Medical shares are owned by company insiders. Comparatively, 2.3% of Cutera shares are owned by company 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.

Profitability

This table compares Natus Medical and Cutera’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natus Medical -7.38% 10.73% 6.61%
Cutera -20.49% -69.92% -32.99%

Volatility & Risk

Natus Medical has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Cutera has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Natus Medical and Cutera, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natus Medical 0 0 0 0 N/A
Cutera 0 2 2 0 2.50

Cutera has a consensus price target of $34.67, indicating a potential upside of 9.08%. Given Cutera’s higher probable upside, analysts clearly believe Cutera is more favorable than Natus Medical.

Valuation & Earnings

This table compares Natus Medical and Cutera’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Natus Medical $530.89 million 1.99 -$22.93 million $1.42 21.87
Cutera $162.72 million 2.77 -$30.77 million ($2.23) -14.25

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

Summary

Natus Medical beats Cutera on 7 of the 13 factors compared between the two stocks.

Natus Medical Company Profile

Natus Medical Incorporated provides neurology, newborn care, and hearing and balance assessment healthcare products and services worldwide. It offers products and services used for the screening, diagnosis, detection, treatment, monitoring, and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction and neurosurgical treatments, epilepsy, sleep disorders, neuromuscular diseases, and balance and mobility disorders. The company also provides computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology; and software systems for managing and tracking disorders and diseases for public health laboratories. In addition, it offers electroencephalography, long term monitoring, intensive care unit monitoring, electromyography, sleep analysis or polysomnography, and intra-operative monitoring solutions. Further, the company provides hearing screening products; diagnostic hearing assessment products to screen for/or diagnose hearing loss, or to identify abnormalities affecting the peripheral and central auditory nervous systems; balance and mobility systems to diagnose and assist in treating balance disorders; and thermoregulation products to control the incubators and warmers. Additionally, it offers jaundice management products; brain injury products; NICVIEW, a live streaming video for families with babies in the neonatal intensive care unit (NICU); essential products used in the everyday operation of NICU; and eye imaging systems and products used in the advanced science and practice of neonatal and pediatric retinal imaging. The company also provides computer-based audiological, otoneurologic, and vestibular instrumentation and sound rooms to hearing and balance care professionals. It serves hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Natus Medical Incorporated was incorporated in 1987 and is headquartered in Pleasanton, California.

Cutera Company Profile

Cutera, Inc., a medical device company, designs, develops, manufactures, markets, and services laser and other energy based aesthetics systems worldwide. The company offers enlighten platform, a laser system that is used for tattoo removal, as well as for the treatment of benign pigmented lesions; excel HR platform, a hair removal solution for various skin types; and truSculpt, a high-powered radio frequency platform designed for deep tissue heating. It also provides excel V, a vascular and benign pigmented lesion treatment platform; xeo platform, a multi-application platform on which a customer purchases hand piece applications for the removal of unwanted hair, treatment of vascular lesions, and skin revitalization by treating discoloration, fine lines, and laxity; Juliet, a laser system for vaginal health; and Secret RF, a fractional radio frequency microneedling device for skin revitalization. In addition, the company offers GenesisPlus, CoolGlide, myQ, enlighten SR, and truSculpt iD products. Further, it provides pulsed light hand pieces for the treatment of discoloration, hair removal, and vascular treatments; Pearl and Pearl Fractional hand pieces; and post-warranty services through extended service contracts or direct billing, as well as offers Titan hand piece refills and marketing brochures through the Internet. The company markets and sells its products through direct sales force to plastic surgeons, dermatologists, gynecologists, family practitioners, primary care physicians, physicians performing aesthetic treatments in non-medical offices, and other qualified practitioners, as well as for physicians offering aesthetic treatments in non-medical offices. Cutera, Inc. was founded in 1998 and is headquartered in Brisbane, California.

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