Comparing Paragon 28 (NYSE:FNA) and AtriCure (NASDAQ:ATRC)

AtriCure (NASDAQ:ATRC) and Paragon 28 (NYSE:FNA) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Volatility and Risk

AtriCure has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, Paragon 28 has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Valuation and Earnings

This table compares AtriCure and Paragon 28’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AtriCure	$399.24 million	2.49	-$30.44 million	($0.80)	-26.11
Paragon 28	$216.39 million	4.03	-$47.84 million	($0.58)	-18.16

AtriCure has higher revenue and earnings than Paragon 28. AtriCure is trading at a lower price-to-earnings ratio than Paragon 28, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for AtriCure and Paragon 28, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AtriCure	0	0	7	0	3.00
Paragon 28	0	0	4	0	3.00

AtriCure currently has a consensus target price of $49.78, suggesting a potential upside of 138.29%. Paragon 28 has a consensus target price of $17.67, suggesting a potential upside of 67.77%. Given AtriCure’s higher probable upside, equities research analysts plainly believe AtriCure is more favorable than Paragon 28.

Profitability

This table compares AtriCure and Paragon 28’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AtriCure	-8.98%	-7.82%	-6.02%
Paragon 28	-22.11%	-22.51%	-13.98%

Institutional & Insider Ownership

99.1% of AtriCure shares are held by institutional investors. Comparatively, 63.6% of Paragon 28 shares are held by institutional investors. 3.2% of AtriCure shares are held by company insiders. Comparatively, 15.3% of Paragon 28 shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

AtriCure beats Paragon 28 on 9 of the 12 factors compared between the two stocks.

About AtriCure

AtriCure, Inc. develops, manufactures, and sells devices for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves to medical centers in the United States, Europe, the Asia-Pacific, and internationally. The company offers Isolator Synergy Clamps, single-use disposable radio frequency products; multifunctional pens and linear ablation devices, such as the MAX Pen device that enables surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation, and ablate cardiac tissue with the same device; and the Coolrail device, which enables users to make longer linear lines of ablation. It also provides cryoICE Cryoablation System that enables the user to make linear ablations of varied lengths; EPi-Sense Systems, a single-use disposable device used for the treatment of symptomatic, drug-refractory, and long-standing persistent atrial fibrillation; cryoSPHERE probe, which provides temporary pain relief by applying cryothermic energy to targeted intercoastal peripheral nerves in the ribcage; AtriClip System, an implantable device coupled to a single-use disposable applier; and LARIAT System, a suture-based solution for soft-tissue closure. In addition, the company sells Lumitip dissectors to separate tissues to provide access to key anatomical structures that are targeted for ablation; Glidepath guides for placement of clamps; Subtle Cannula's to support access for EPi-Sense catheters; and various reusable cardiac surgery instruments. It markets and sells its products through independent distributors and direct sales personnel. The company was incorporated in 2000 and is headquartered in Mason, Ohio.

About Paragon 28

Paragon 28, Inc. develops, distributes, and sells foot and ankle surgical systems in the United States and internationally. It offers plating systems, including gorilla plating systems, such as lisfranc, lapidus, lateral column, calcaneus slide, and naviculocuneiform (NC) fusion plating systems; baby gorilla plate-specific screws, navicular fracture plates, and 5th metatarsal hook plates; and silverback plating systems. The company also provides precision guide technology for various procedures consisting of fusion, a procedure to address bunion deformities that fuses two bones on the big toe; first tarsometatarsal arthrodesis; and metatarsal osteotomy for bunion correction, medial column beaming for charcot foot reconstruction, ankle fusion plating, and NC joint arthrodesis. In addition, it offers monster, mini monster, and joust beaming screw systems for use in bone reconstruction, osteotomy, arthrodesis, joint fusion, ligament fixation, fracture repair, and fracture fixation; APEX 3D total ankle replacement systems; and total talus spacers to replace the talus and bone in the ankle that connects the leg and foot. Further, the company provides forefoot or hallux valgus correction systems, including phantom intramedullary nail systems for the treatment of severe hallux valgus; and various orthobiologics comprising bone wedges, grafts, demineralized bone matrices, bone void fillers, synthetic materials, amniotic products, and a biocompatible collagen matrix, as well as PRESERVE bone graft systems for homologous application. Additionally, it offers soft tissue fixation systems, titanium sprayed polyetheretherketone implants, nitinol staple systems, stabilization systems, and curved instruments. The company serves hospitals and ambulatory surgery centers through a network of sales representatives and stocking distributors. Paragon 28, Inc. was founded in 2010 and is headquartered in Englewood, Colorado.