Nevro (NYSE:NVRO) and STRATA Skin Sciences (NASDAQ:SSKN) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility & Risk

Nevro has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500. Comparatively, STRATA Skin Sciences has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Valuation and Earnings

This table compares Nevro and STRATA Skin Sciences’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nevro $387.29 million 5.01 -$49.21 million ($1.64) -38.96
STRATA Skin Sciences $31.45 million 2.70 -$18.83 million $1.97 1.44

STRATA Skin Sciences has lower revenue, but higher earnings than Nevro. Nevro is trading at a lower price-to-earnings ratio than STRATA Skin Sciences, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

28.2% of STRATA Skin Sciences shares are owned by institutional investors. 6.9% of Nevro shares are owned by insiders. Comparatively, 45.6% of STRATA Skin Sciences shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Nevro and STRATA Skin Sciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nevro -12.70% -20.13% -10.88%
STRATA Skin Sciences -18.33% -18.83% -12.24%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Nevro and STRATA Skin Sciences, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nevro 2 2 7 0 2.45
STRATA Skin Sciences 0 0 3 0 3.00

Nevro currently has a consensus price target of $64.64, indicating a potential upside of 1.17%. STRATA Skin Sciences has a consensus price target of $6.00, indicating a potential upside of 111.27%. Given STRATA Skin Sciences’ stronger consensus rating and higher probable upside, analysts plainly believe STRATA Skin Sciences is more favorable than Nevro.

Summary

STRATA Skin Sciences beats Nevro on 9 of the 14 factors compared between the two stocks.

Nevro Company Profile

Nevro Corp., a medical device company, provides products for the patients suffering from chronic pain in the United States and internationally. The company develops and commercializes the Senza spinal cord stimulation system, an evidence-based neuromodulation platform for the treatment of chronic pain. Its solution for chronic pain also includes HF10 Therapy, which delivers neuromodulation solutions for treating chronic pain based on available clinical evidence. The company sells its products through its direct sales force, and a network of sales agents and independent distributors. Nevro Corp. was founded in 2006 and is headquartered in Redwood City, California.

STRATA Skin Sciences Company Profile

STRATA Skin Sciences, Inc., a medical technology company, focuses on the therapeutic and aesthetic dermatology market. The company operates through three segments: Dermatology Recurring Procedures, Dermatology Procedures Equipment, and Dermatology Imaging. Its products include XTRAC laser and VTRAC excimer lamp systems used for the treatment of psoriasis, vitiligo, and other skin conditions; the STRATAPEN MicroSystems, a micropigmentation device; and Nordlys, a multi-technology aesthetic laser device for treating vascular and pigmented lesions. STRATA Skin Sciences, Inc. was founded in 1989 and is based in Horsham, Pennsylvania.

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