Tandem Diabetes Care (NASDAQ: TNDM) and Ocular Therapeutix (NASDAQ:OCUL) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Profitability

This table compares Tandem Diabetes Care and Ocular Therapeutix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tandem Diabetes Care -110.70% -1,177.11% -87.18%
Ocular Therapeutix -3,005.52% -101.03% -69.76%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Tandem Diabetes Care and Ocular Therapeutix, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tandem Diabetes Care 0 5 4 0 2.44
Ocular Therapeutix 0 2 4 0 2.67

Tandem Diabetes Care currently has a consensus price target of $5.08, indicating a potential upside of 625.98%. Ocular Therapeutix has a consensus price target of $24.00, indicating a potential upside of 328.57%. Given Tandem Diabetes Care’s higher probable upside, research analysts clearly believe Tandem Diabetes Care is more favorable than Ocular Therapeutix.

Risk and Volatility

Tandem Diabetes Care has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Ocular Therapeutix has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.

Insider & Institutional Ownership

45.2% of Tandem Diabetes Care shares are held by institutional investors. Comparatively, 59.1% of Ocular Therapeutix shares are held by institutional investors. 20.9% of Tandem Diabetes Care shares are held by company insiders. Comparatively, 26.1% of Ocular Therapeutix shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Tandem Diabetes Care and Ocular Therapeutix’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tandem Diabetes Care $81.51 million 0.43 -$76.17 million ($2.64) -0.27
Ocular Therapeutix $1.90 million 85.64 -$54.64 million ($2.13) -2.63

Ocular Therapeutix has higher revenue, but lower earnings than Tandem Diabetes Care. Ocular Therapeutix is trading at a lower price-to-earnings ratio than Tandem Diabetes Care, indicating that it is currently the more affordable of the two stocks.

Summary

Ocular Therapeutix beats Tandem Diabetes Care on 9 of the 12 factors compared between the two stocks.

Tandem Diabetes Care Company Profile

Tandem Diabetes Care, Inc. is a medical device company. The Company is engaged in designing, developing and commercializing products for people with insulin-dependent diabetes. The Company manufactures and sells three insulin pump products, which include t:slim Insulin Delivery System (t:slim), t:flex Insulin Delivery System (t:flex) and t:slim G4 Insulin Delivery System (t:slim G4). Its technology platform features Micro-Delivery Technology, a miniaturized pumping mechanism, which draws insulin from a flexible bag within the pump’s cartridge rather than relying on a syringe and plunger mechanism. It also features a software, which is a vivid color touch screen and a micro- universal serial bus (USB) connection that supports both a rechargeable battery and uploads to t:connect Diabetes Management Application (t:connect), its custom cloud-based data management application that provides display therapy management data from the pump and supported blood glucose meters.

Ocular Therapeutix Company Profile

Ocular Therapeutix, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of therapies for diseases and conditions of the eye using its hydrogel platform technology. The Company’s bioresorbable hydrogel based product candidates are designed to provide sustained delivery of therapeutic agents to the eye. Its lead product candidates are DEXTENZA (dexamethasone insert), for the treatment of post-surgical ocular inflammation and pain, allergic conjunctivitis and dry eye disease, and OTX-TP, for the treatment of glaucoma and ocular hypertension, which are extended-delivery, drug-eluting inserts that are placed into the canaliculus through a natural opening called the punctum located in the inner portion of the eyelid near the nose. It also has an intravitreal hydrogel depot, which is in preclinical development for the treatment of diseases and conditions of the back of the eye, including wet age-related macular degeneration (wet AMD).

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