Financial Analysis: AtriCure (NASDAQ:ATRC) vs. TerrAscend (OTCMKTS:TSNDF)

AtriCure (NASDAQ:ATRC) and TerrAscend (OTCMKTS:TSNDF) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for AtriCure and TerrAscend, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AtriCure	1	0	10	0	2.82
TerrAscend	0	0	0	2	4.00

AtriCure presently has a consensus target price of $52.22, indicating a potential upside of 44.94%. Given AtriCure’s higher possible upside, research analysts clearly believe AtriCure is more favorable than TerrAscend.

Insider & Institutional Ownership

99.1% of AtriCure shares are owned by institutional investors. Comparatively, 5.8% of TerrAscend shares are owned by institutional investors. 3.5% of AtriCure shares are owned by insiders. Comparatively, 32.2% of TerrAscend shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

AtriCure has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, TerrAscend has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500.

Earnings & Valuation

This table compares AtriCure and TerrAscend”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AtriCure	$518.31 million	3.46	-$44.70 million	($0.61)	-59.07
TerrAscend	$306.68 million	0.44	-$80.23 million	($0.41)	-1.08

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

Profitability

This table compares AtriCure and TerrAscend’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AtriCure	-5.55%	-2.56%	-1.95%
TerrAscend	-42.72%	-18.32%	-4.36%

Summary

AtriCure beats TerrAscend on 10 of the 15 factors compared between the two stocks.

About AtriCure

AtriCure, Inc. develops, manufactures, and sells devices for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves to medical centers in the United States, Europe, the Asia-Pacific, and internationally. The company offers Isolator Synergy Clamps, single-use disposable radio frequency products; multifunctional pens and linear ablation devices, such as the MAX Pen device that enables surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation, and ablate cardiac tissue with the same device; and the Coolrail device, which enables users to make longer linear lines of ablation. It also provides cryoICE Cryoablation System that enables the user to make linear ablations of varied lengths; EPi-Sense Systems, a single-use disposable device used for the treatment of symptomatic, drug-refractory, and long-standing persistent atrial fibrillation; cryoSPHERE probe, which provides temporary pain relief by applying cryothermic energy to targeted intercoastal peripheral nerves in the ribcage; AtriClip System, an implantable device coupled to a single-use disposable applier; and LARIAT System, a suture-based solution for soft-tissue closure. In addition, the company sells Lumitip dissectors to separate tissues to provide access to key anatomical structures that are targeted for ablation; Glidepath guides for placement of clamps; Subtle Cannula's to support access for EPi-Sense catheters; and various reusable cardiac surgery instruments. It markets and sells its products through independent distributors and direct sales personnel. The company was incorporated in 2000 and is headquartered in Mason, Ohio.

About TerrAscend

TerrAscend Corp. cultivates, processes, and sells medical and adult use cannabis in Canada and the United States. The company produces and distributes hemp-derived wellness products to retail locations; and manufactures vaporizables, concentrates, topicals, tinctures and edibles. It also operates retail dispensaries under the Apothecarium and State Flower brand names. The company was incorporated in 2017 and is headquartered in Mississauga, Canada.