Neuronetics (NASDAQ:STIM) and Hancock Jaffe Laboratories (NASDAQ:HJLI) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Profitability

This table compares Neuronetics and Hancock Jaffe Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neuronetics -47.21% -1,385.60% -27.67%
Hancock Jaffe Laboratories -5,161.19% -302.90% -182.37%

Institutional and Insider Ownership

81.0% of Neuronetics shares are owned by institutional investors. Comparatively, 1.1% of Hancock Jaffe Laboratories shares are owned by institutional investors. 12.0% of Neuronetics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Neuronetics and Hancock Jaffe Laboratories’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Neuronetics $52.78 million 4.45 -$24.10 million ($2.69) -4.77
Hancock Jaffe Laboratories $190,000.00 74.55 -$13.04 million ($1.91) -0.52

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Neuronetics and Hancock Jaffe Laboratories, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neuronetics 0 0 5 0 3.00
Hancock Jaffe Laboratories 0 0 0 0 N/A

Neuronetics currently has a consensus price target of $32.25, indicating a potential upside of 151.17%. Given Neuronetics’ higher possible upside, equities analysts plainly believe Neuronetics is more favorable than Hancock Jaffe Laboratories.

Summary

Neuronetics beats Hancock Jaffe Laboratories on 7 of the 12 factors compared between the two stocks.

Neuronetics Company Profile

Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with psychiatric disorders in the United States, Japan, and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrist customers. Neuronetics, Inc. was founded in 2003 and is headquartered in Malvern, Pennsylvania.

Hancock Jaffe Laboratories Company Profile

Hancock Jaffe Laboratories, Inc., a development stage medical device company, develops and sells biological tissue solutions to treat patients with coronary, vascular, end stage renal, and peripheral arterial diseases in the United States and Europe. The company develops and manufactures implantable cardiovascular bioprosthetic devices for patients with cardiovascular disease, peripheral arterial and venous disease, and end stage renal disease. Its products include the Bioprosthetic Heart Valve, a bio-prosthetic heart valve designed to mimic and function like a native heart valve; the CoreoGraft, a device for use as an alternate or supplemental coronary vascular conduit in coronary bypass surgery; and the Venous Valve, a bioprosthetic, pig venous valve for patients with lower limb chronic venous insufficiency. The company was founded in 1987 and is headquartered in Irvine, California. As of July 18, 2006, Hancock Jaffe Laboratories, Inc. is a subsidiary of Leman Cardiovascular SA.

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