Obalon Therptcs (NASDAQ: OBLN) and HeartWare International (NASDAQ:HTWR) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Insider & Institutional Ownership

41.7% of Obalon Therptcs shares are held by institutional investors. 16.4% of Obalon Therptcs shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Obalon Therptcs and HeartWare International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Obalon Therptcs $4.98 million 29.97 -$27.12 million ($6.90) -1.29
HeartWare International N/A N/A N/A ($3.40) -17.05

HeartWare International has higher revenue, but lower earnings than Obalon Therptcs. HeartWare International is trading at a lower price-to-earnings ratio than Obalon Therptcs, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Obalon Therptcs and HeartWare International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Obalon Therptcs -566.87% -108.07% -48.50%
HeartWare International -15.84% -25.32% -10.14%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Obalon Therptcs and HeartWare International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Obalon Therptcs 1 0 3 0 2.50
HeartWare International 0 0 0 0 N/A

Obalon Therptcs currently has a consensus target price of $15.25, indicating a potential upside of 71.93%. Given Obalon Therptcs’ higher probable upside, equities research analysts plainly believe Obalon Therptcs is more favorable than HeartWare International.

Summary

Obalon Therptcs beats HeartWare International on 5 of the 9 factors compared between the two stocks.

Obalon Therptcs Company Profile

Obalon Therapeutics, Inc. is a United States-based commercial-stage medical device company focused on developing and commercializing medical devices to treat obese and overweight people by facilitating weight loss. The Company’s product, Obalon balloon system, is a swallowable, gas-filled intragastric balloon designed to provide weight loss in obese patients. The Obalon balloon system is intended to be used as an adjunct to a moderate intensity diet and behavior modification program. All balloons must be removed six months after the first balloon is placed. The Obalon balloon system intends to provide patients and physicians with a reversible and repeatable weight loss solution in an outpatient setting, without altering patient anatomy or requiring surgery. The Company has received Premarket approval (PMA) for its Obalon balloon system based on the results of its United States pivotal clinical trial, referred to as the SMART trial.

HeartWare International Company Profile

Heartware International, Inc. is a medical device company. The Company develops and manufactures miniaturized implantable heart pumps or ventricular assist devices to treat patients suffering from advanced heart failure. The Company operates in the segment of design and manufacture of medical devices. The HeartWare Ventricular Assist System (HVAD System), which includes a ventricular assist device (VAD) or blood pump, patient accessories and surgical tools, provides circulatory support for patients in the advanced stage of heart failure. The HVAD System is designed to be implanted adjacent to the heart, avoiding abdominal surgery. The HVAD System features the centrifugal pump designed to be implanted in the chest, directly adjacent to the heart. It develops MVAD System, a miniaturized device. The CircuLite Surgical System is designed to be implanted through a right, mini-thoracotomy procedure and does not require a sternotomy or cardiopulmonary bypass.

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