Endologix (NASDAQ: ELGX) and Second Sight Medical Products (NASDAQ:EYES) 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, earnings, dividends, profitabiliy, risk, valuation and analyst recommendations.

Insider and Institutional Ownership

15.6% of Second Sight Medical Products shares are owned by institutional investors. 3.9% of Endologix shares are owned by insiders. Comparatively, 34.7% of Second Sight Medical Products shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Endologix and Second Sight Medical Products, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Endologix 0 10 1 0 2.09
Second Sight Medical Products 0 0 1 0 3.00

Endologix currently has a consensus target price of $7.20, suggesting a potential upside of 65.52%. Second Sight Medical Products has a consensus target price of $5.00, suggesting a potential upside of 306.50%. Given Second Sight Medical Products’ stronger consensus rating and higher possible upside, analysts plainly believe Second Sight Medical Products is more favorable than Endologix.

Profitability

This table compares Endologix and Second Sight Medical Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Endologix -66.43% -48.92% -16.16%
Second Sight Medical Products -646.89% -168.72% -129.30%

Risk & Volatility

Endologix has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Second Sight Medical Products has a beta of 3.61, suggesting that its share price is 261% more volatile than the S&P 500.

Earnings and Valuation

This table compares Endologix and Second Sight Medical Products’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Endologix $193.17 million 1.87 -$61.29 million ($1.55) -2.81
Second Sight Medical Products $3.94 million 17.60 -$34.50 million ($0.72) -1.71

Second Sight Medical Products has higher revenue, but lower earnings than Endologix. Endologix is trading at a lower price-to-earnings ratio than Second Sight Medical Products, indicating that it is currently the more affordable of the two stocks.

Summary

Second Sight Medical Products beats Endologix on 8 of the 12 factors compared between the two stocks.

About Endologix

Endologix, Inc. is engaged in developing, manufacturing, marketing and selling medical devices for the treatment of aortic disorders. The Company’s products are intended for the treatment of abdominal aortic aneurysms (AAA). The AAA products are built on one of two platforms, including traditional minimally invasive endovascular repair (EVAR) or endovascular sealing (EVAS), its solution for sealing the aneurysm sac while maintaining blood flow through two blood flow lumens. The EVAR products include the Endologix AFX Endovascular AAA System (AFX), the VELA Proximal Endograft (VELA) and the Endologix Powerlink with Intuitrak Delivery System (Intuitrak). The EVAS product is the Nellix EndoVascular Aneurysm Sealing System (Nellix EVAS System). It offers accessories to facilitate the optimal delivery of its EVAR products, including compatible guidewires, snares, and catheter introducer sheaths.

About Second Sight Medical Products

Second Sight Medical Products, Inc. is engaged in developing, manufacturing and marketing prosthetic devices that restore vision to blind individuals. The Company’s product, the Argus II System, treats outer retinal degenerations, such as retinitis pigmentosa (RP). The Argus II System provides an artificial form of vision that differs from the vision of people with normal sight. It does not restore normal vision and it does not slow or reverse the progression of the disease. The Company’s Argus II System employs electrical stimulation to bypass degenerated photoreceptor cells and to stimulate remaining viable retinal cells thereby inducing visual perception in blind individuals. The Argus II System works by converting video images captured by a miniature camera housed in a patient’s glasses into a series of small electrical pulses that are transmitted wirelessly to an array of electrodes that are implanted on the surface of the retina.

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