Natus Medical (NASDAQ:NTUS) and Soleno Therapeutics (NASDAQ:SLNO) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Earnings and Valuation

This table compares Natus Medical and Soleno Therapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Natus Medical $495.52 million 1.68 -$15.67 million $1.24 19.64
Soleno Therapeutics N/A N/A -$30.77 million ($0.70) -2.79

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

Insider and Institutional Ownership

92.1% of Natus Medical shares are held by institutional investors. Comparatively, 44.6% of Soleno Therapeutics shares are held by institutional investors. 1.7% of Natus Medical shares are held by company insiders. Comparatively, 26.6% of Soleno Therapeutics 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Natus Medical and Soleno Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natus Medical 0 0 0 0 N/A
Soleno Therapeutics 0 0 3 0 3.00

Soleno Therapeutics has a consensus price target of $9.33, suggesting a potential upside of 378.63%. Given Soleno Therapeutics’ higher possible upside, analysts clearly believe Soleno Therapeutics is more favorable than Natus Medical.

Profitability

This table compares Natus Medical and Soleno Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natus Medical -1.79% 10.55% 6.67%
Soleno Therapeutics N/A -178.27% -85.76%

Risk and Volatility

Natus Medical has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Soleno Therapeutics has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500.

Summary

Natus Medical beats Soleno Therapeutics on 7 of the 12 factors compared between the two stocks.

About Natus Medical

Natus Medical Incorporated provides neurology, newborn care, and hearing and balance assessment healthcare products and services worldwide. It offers products and services used for the screening, diagnosis, detection, treatment, monitoring, and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction and neurosurgical treatments, epilepsy, sleep disorders, neuromuscular diseases, and balance and mobility disorders. The company also provides computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology; and software systems for managing and tracking disorders and diseases for public health laboratories. In addition, it offers electroencephalography, long term monitoring, intensive care unit monitoring, electromyography, sleep analysis or polysomnography, and intra-operative monitoring solutions. Further, the company provides hearing screening products; diagnostic hearing assessment products to screen for/or diagnose hearing loss, or to identify abnormalities affecting the peripheral and central auditory nervous systems; balance and mobility systems to diagnose and assist in treating balance disorders; and thermoregulation products to control the incubators and warmers. Additionally, it offers jaundice management products; brain injury products; NICVIEW, a live streaming video for families with babies in the neonatal intensive care unit (NICU); essential products used in the everyday operation of NICU; and eye imaging systems and products used in the advanced science and practice of neonatal and pediatric retinal imaging. The company also provides computer-based audiological, otoneurologic, and vestibular instrumentation and sound rooms to hearing and balance care professionals. It serves hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Natus Medical Incorporated was incorporated in 1987 and is headquartered in Pleasanton, California.

About Soleno Therapeutics

Soleno Therapeutics, Inc. focuses on the development and commercialization of novel therapeutics for the treatment of rare diseases. Its lead candidate is diazoxide choline controlled-release, a tablet that is in Phase III clinical trial for the treatment of Prader-Willi Syndrome. The company was formerly known as Capnia, Inc. and changed its name to Soleno Therapeutics, Inc. in May 2017. Soleno Therapeutics, Inc. was incorporated in 1999 and is based in Redwood City, California.

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