TearLab (NASDAQ: HAIR) and Restoration Robotics (NASDAQ:HAIR) are both small-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Profitability

This table compares TearLab and Restoration Robotics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TearLab -35.53% N/A -59.51%
Restoration Robotics -104.01% N/A -89.25%

Valuation and Earnings

This table compares TearLab and Restoration Robotics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TearLab $27.12 million 0.09 -$16.10 million ($2.70) -0.08
Restoration Robotics $21.30 million 2.48 -$17.84 million ($2.50) -0.72

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

Insider and Institutional Ownership

0.2% of TearLab shares are held by institutional investors. Comparatively, 28.1% of Restoration Robotics shares are held by institutional investors. 5.2% of TearLab shares are held by insiders. Comparatively, 37.8% of Restoration Robotics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for TearLab and Restoration Robotics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TearLab 0 0 0 0 N/A
Restoration Robotics 0 0 3 0 3.00

Restoration Robotics has a consensus target price of $9.00, indicating a potential upside of 397.24%. Given Restoration Robotics’ higher probable upside, analysts plainly believe Restoration Robotics is more favorable than TearLab.

Summary

Restoration Robotics beats TearLab on 6 of the 11 factors compared between the two stocks.

About TearLab

TearLab Corporation operates as an in-vitro diagnostic company in the United States and internationally. It offers TearLab Osmolority System, a proprietary in vitro diagnostic tear testing platform that measures tear film osmolarity for the diagnosis of dry eye disease; and enables eye care practitioners to test for sensitive and specific biomarkers using nanoliters of tear film at the point-of-care. Its TearLab Osmolarity System consists of TearLab disposable, a single-use microfluidic microchip; TearLab pen, a hand-held device that interfaces with the TearLab disposable; and TearLab reader, a small desktop unit that allows for the docking of the TearLab pen, as well as provides a quantitative reading for the operator. The company was formerly known as OccuLogix, Inc. TearLab Corporation was founded in 1996 and is headquartered in San Diego, California.

About Restoration Robotics

Restoration Robotics, Inc., a medical device company, develops and commercializes image-guided robotic systems in the United States and internationally. The company offers ARTAS System, a physician-assisted robotic system that identifies and dissects hair follicular units directly from the scalp and creates recipient implant sites. Its system includes the ARTAS Hair Studio application, an interactive three-dimensional patient consultation tool that enables a physician to create a simulated hair transplant model for use in patient consultations. The company was founded in 2002 and is headquartered in San Jose, California.

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