Financial Analysis: Fonar (NASDAQ:FONR) versus Evolus (NASDAQ:EOLS)

Evolus (NASDAQ:EOLS) and Fonar (NASDAQ:FONR) 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, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Institutional & Insider Ownership

90.7% of Evolus shares are held by institutional investors. Comparatively, 50.6% of Fonar shares are held by institutional investors. 5.9% of Evolus shares are held by insiders. Comparatively, 1.6% of Fonar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Evolus and Fonar, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evolus	1	1	4	0	2.50
Fonar	0	1	0	0	2.00

Evolus presently has a consensus target price of $20.80, suggesting a potential upside of 268.14%. Given Evolus’ stronger consensus rating and higher possible upside, equities analysts plainly believe Evolus is more favorable than Fonar.

Risk & Volatility

Evolus has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Fonar has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Valuation and Earnings

This table compares Evolus and Fonar”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evolus	$266.27 million	1.38	-$50.42 million	($0.92)	-6.14
Fonar	$104.35 million	1.10	$8.33 million	$1.11	16.71

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

Profitability

This table compares Evolus and Fonar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evolus	-20.49%	N/A	-23.47%
Fonar	7.08%	4.66%	3.48%

About Evolus

Evolus, Inc., a performance beauty company, focuses on delivering products in the cash-pay aesthetic market in the United States, Canada, and Europe. The company offers Jeuveau, a proprietary 900 kilodalton purified botulinum toxin type A formulation for the temporary improvement in the appearance of moderate to severe glabellar lines in adults. It also provides dermal filler products under the Estyme and Evolysse names. The company was incorporated in 2012 and is headquartered in Newport Beach, California.

About Fonar

FONAR Corporation, together with its subsidiaries, engages in the research, development, production, and marketing of magnetic resonance imaging (MRI) scanners for the detection and diagnosis of human diseases in the United States. The company operates in two segments, Medical Equipment, and Physician Management and Diagnostic Services. It provides Upright MRI scanner that allows patients to be scanned in weight-bearing conditions, such as standing, sitting, bending, or lying down. The company also offers non-medical management, including administrative services, billing and collection services, credentialing services, contract negotiations, compliance consulting, purchasing IT services, hiring, conducting interviews, training, supervision and management of non-medical personnel, storage of medical records, office space, equipment, repair maintenance services, accounting, assistance with compliance matters, and development and implementation of practice growth and marketing strategies. It owns and operates diagnostic imaging facilities in Florida; and manages MRI scanning facilities. The company markets its scanners to private diagnostic imaging centers and hospital outpatient imaging facilities. FONAR Corporation was founded in 1970 and is based in Melville, New York.