RadNet (NASDAQ: RDNT) and NeoGenomics (NASDAQ:NEO) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitabiliy, analyst recommendations, dividends and institutional ownership.

Earnings & Valuation

This table compares RadNet and NeoGenomics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RadNet $897.16 million 0.40 $111.45 million $0.17 45.00
NeoGenomics $246.06 million 2.98 $27.30 million ($0.32) -28.91

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

Profitability

This table compares RadNet and NeoGenomics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RadNet 0.86% 19.20% 1.04%
NeoGenomics -2.81% 6.02% 3.10%

Risk and Volatility

RadNet has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, NeoGenomics has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Insider and Institutional Ownership

46.3% of RadNet shares are held by institutional investors. Comparatively, 78.1% of NeoGenomics shares are held by institutional investors. 9.4% of RadNet shares are held by insiders. Comparatively, 12.2% of NeoGenomics 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 Ratings

This is a breakdown of recent ratings and recommmendations for RadNet and NeoGenomics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RadNet 0 2 1 0 2.33
NeoGenomics 1 0 4 0 2.60

RadNet presently has a consensus target price of $8.00, indicating a potential upside of 4.58%. NeoGenomics has a consensus target price of $10.75, indicating a potential upside of 16.22%. Given NeoGenomics’ stronger consensus rating and higher possible upside, analysts clearly believe NeoGenomics is more favorable than RadNet.

Summary

NeoGenomics beats RadNet on 8 of the 13 factors compared between the two stocks.

About RadNet

RadNet, Inc. is a provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States. As of December 31, 2016, the Company operated directly or indirectly through joint ventures, 305 centers located in California, Delaware, Florida, Maryland, New Jersey, New York and Rhode Island. Its centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders. Its services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), fluoroscopy and other related procedures. As of December 31, 2016, the Company had in operation 257 MRI systems, 157 CT systems, 47 PET or combination PET/CT systems, 48 nuclear medicine systems, 479 X-ray systems, 279 mammography systems, 551 ultrasound systems and 104 fluoroscopy systems.

About NeoGenomics

NeoGenomics, Inc. is an operator of a network of cancer-focused genetic testing laboratories. The Company operates in Laboratory Testing Segment. This segment delivers testing services to hospitals, pathologists, oncologists, other clinicians and researchers. It has laboratory locations in Ft. Myers and Tampa, Florida; Aliso Viejo, Fresno, Irvine, and West Sacramento, California; Houston, Texas and Nashville, and Tennessee. It offers testing services, which include Cytogenetics, Fluorescence In-Situ Hybridization (FISH), Flow cytometry, Immunohistochemistry (IHC), Molecular testing and Pathology consultation. Its Pharma Services and Clinical Trials group provides testing services in support of its pharmaceutical clients’ oncology programs from discovery to commercialization. It helps its customers develop a biomarker hypothesis by recommending an optimal platform for molecular screening and backing its discovery tools with the informatics to capture meaningful data.

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