IRIS International (NASDAQ: IRIS) and NanoString Technologies (NASDAQ:NSTG) are both small-cap healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Insider and Institutional Ownership

68.9% of IRIS International shares are held by institutional investors. Comparatively, 92.3% of NanoString Technologies shares are held by institutional investors. 9.7% of IRIS International shares are held by company insiders. Comparatively, 24.4% of NanoString Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares IRIS International and NanoString Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IRIS International -61.58% -36.70% -29.47%
NanoString Technologies -44.24% -174.55% -34.82%

Volatility and Risk

IRIS International has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, NanoString Technologies has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for IRIS International and NanoString Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IRIS International 0 0 0 0 N/A
NanoString Technologies 0 3 1 0 2.25

NanoString Technologies has a consensus price target of $17.33, suggesting a potential upside of 126.58%. Given NanoString Technologies’ higher possible upside, analysts plainly believe NanoString Technologies is more favorable than IRIS International.

Valuation and Earnings

This table compares IRIS International and NanoString Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IRIS International N/A N/A N/A $0.04 487.25
NanoString Technologies $86.49 million 2.24 -$47.08 million ($2.07) -3.70

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

Summary

NanoString Technologies beats IRIS International on 6 of the 10 factors compared between the two stocks.

IRIS International Company Profile

Mitcham Industries, Inc. is a provider of equipment to the geophysical, oceanographic and hydrographic industries. The Company operates through two segments. The Equipment Leasing segment is primarily engaged in the leasing of seismic equipment to companies in the oil and gas industry across the world. The Equipment Manufacturing and Sales segment is engaged in the design, production and sale of marine seismic equipment, and oceanographic and hydrographic equipment. Its leasing business includes Mitcham Canada ULC, Seismic Asia Pacific Pty Ltd., Mitcham Seismic Eurasia LLC, Mitcham Europe Ltd. and Mitcham Marine Leasing Pte. Ltd. The Equipment Manufacturing and Sales Segment includes its Seamap International Holdings Pte, Ltd. (Seamap) business and Klein Marine Systems, Inc. (Klein). Seamap designs, manufactures and sells a range of products for the seismic, hydrographic and offshore industries. Klein develops and manufactures high performance side scan sonar systems.

NanoString Technologies Company Profile

NanoString Technologies, Inc. develops, manufactures and sells intuitive products that unlock scientifically valuable and clinically actionable biologic information from minute amounts of tissue. The Company is engaged in the development, manufacture and commercialization of instruments, consumables and services for profiling the activity of hundreds of genes and proteins simultaneously from a single tissue sample. The Company’s nCounter Analysis System is an automated, multi-application, digital detection and counting system, which directly profiles hundreds of molecules simultaneously using a barcoding technology. The Company markets systems and related consumables to researchers in academic, government and biopharmaceutical laboratories for use in understanding fundamental biology and the molecular basis of diseases, such as cancer, and to clinical laboratories and medical centers for diagnostic use.

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