NanoString Technologies (NASDAQ: NSTG) and Natera (NASDAQ:NTRA) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and target prices for NanoString Technologies and Natera, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NanoString Technologies 0 1 1 0 2.50
Natera 0 0 4 0 3.00

NanoString Technologies currently has a consensus target price of $20.00, indicating a potential upside of 27.47%. Natera has a consensus target price of $15.75, indicating a potential upside of 20.23%. Given NanoString Technologies’ higher probable upside, research analysts plainly believe NanoString Technologies is more favorable than Natera.

Institutional & Insider Ownership

93.0% of NanoString Technologies shares are owned by institutional investors. Comparatively, 59.8% of Natera shares are owned by institutional investors. 24.4% of NanoString Technologies shares are owned by company insiders. Comparatively, 12.6% of Natera shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares NanoString Technologies and Natera’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NanoString Technologies -44.28% -329.59% -36.94%
Natera -62.64% -137.46% -64.82%

Risk & Volatility

NanoString Technologies has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Natera has a beta of 2.32, indicating that its stock price is 132% more volatile than the S&P 500.

Valuation and Earnings

This table compares NanoString Technologies and Natera’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NanoString Technologies $101.82 million 3.88 -$35.93 million ($2.13) -7.37
Natera $203.71 million 3.42 -$118.85 million ($2.44) -5.37

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

Summary

NanoString Technologies beats Natera on 8 of the 13 factors compared between the two stocks.

NanoString Technologies Company Profile

NanoString Technologies, Inc. develops, manufactures and sells intuitive products that unlock scientifically valuable and clinically actionable biologic information from minute amounts of tissue. The Company is engaged in the development, manufacture and commercialization of instruments, consumables and services for profiling the activity of hundreds of genes and proteins simultaneously from a single tissue sample. The Company’s nCounter Analysis System is an automated, multi-application, digital detection and counting system, which directly profiles hundreds of molecules simultaneously using a barcoding technology. The Company markets systems and related consumables to researchers in academic, government and biopharmaceutical laboratories for use in understanding fundamental biology and the molecular basis of diseases, such as cancer, and to clinical laboratories and medical centers for diagnostic use.

Natera Company Profile

Natera, Inc. is a diagnostics company. The Company is engaged in the discovery, development and commercialization of genetic testing services. It offers Panorama Non-Invasive Prenatal Test that screens for chromosomal abnormalities of a fetus with a blood draw from the mother; Horizon Carrier Screening to determine carrier status for a large number of severe genetic diseases that could be passed on to the carrier’s children; Spectrum Pre-implantation Genetic Screening and Spectrum Pre-implantation Genetic Diagnosis to analyze chromosomal anomalies or inherited genetic conditions during an in vitro fertilization cycle to select embryos with the probability of becoming healthy children; Anora Products of Conception test to analyze fetal chromosomes to understand the cause of miscarriage, and Non-Invasive Paternity Testing, to determine paternity by analyzing the fragments of fetal deoxyribonucleic acid in a pregnant mother’s blood and a blood sample from the alleged father(s).

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