Aradigm (OTCMKTS: ECTE) and Echo Therapeutics (OTCMKTS:ECTE) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Insider and Institutional Ownership

30.0% of Aradigm shares are held by institutional investors. 4.5% of Aradigm shares are held by insiders. Comparatively, 7.0% of Echo Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Aradigm and Echo Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aradigm 0 1 0 0 2.00
Echo Therapeutics 0 0 0 0 N/A

Aradigm currently has a consensus target price of $10.00, suggesting a potential upside of 740.34%. Given Aradigm’s higher probable upside, analysts plainly believe Aradigm is more favorable than Echo Therapeutics.

Volatility and Risk

Aradigm has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Echo Therapeutics has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Earnings & Valuation

This table compares Aradigm and Echo Therapeutics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aradigm $14.47 million 1.25 -$10.70 million ($0.72) -1.65
Echo Therapeutics N/A N/A -$22.19 million N/A N/A

Aradigm has higher revenue and earnings than Echo Therapeutics.

Profitability

This table compares Aradigm and Echo Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aradigm -244.15% N/A -240.23%
Echo Therapeutics N/A N/A N/A

About Aradigm

Aradigm Corp. operates as a pharmaceutical company, which focuses on the development and commercialization of drugs delivered by inhalation for the prevention and treatment of severe respiratory diseases by pulmonologists. Its technologies include diabetes and pain management, AERx essence devices. The company was founded in 1991 and is headquartered in Hayward, CA.

About Echo Therapeutics

Echo Therapeutics, Inc. engages in the development of transdermal skin permeation and diagnostic medical devices for wearable-health consumer and diabetes outpatient markets. It is developing continuous glucose monitoring (CGM) system, a needle-free wireless continuous glucose monitoring system in a hospital setting in the European Union. The company has a licensing agreement with Ferndale Pharma Group, Inc. to develop, manufacture, distribute, and market devices for skin preparation prior to the application of topical anesthetics or analgesics prior to a range of needle-based medical procedures in North America, the United Kingdom, South America, Australia, New Zealand, Switzerland, and other portions of the European Community. In addition, it has a license agreement with Handok Pharmaceuticals Co., Ltd. to develop, use, market, import, and sell CGM to medical facilities and individual consumers in South Korea; and a license, development, and commercialization agreement with Medical Technologies Innovation Asia, Ltd to research, develop, manufacture, and use CGM in the People's Republic of China, Hong Kong, Macau, and Taiwan. The company was founded in 1989 and is headquartered in Iselin, New Jersey.

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