Critical Analysis: ClearPoint Neuro (NASDAQ:CLPT) versus Neuronetics (NASDAQ:STIM)

ClearPoint Neuro (NASDAQ:CLPT) and Neuronetics (NASDAQ:STIM) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

30.1% of ClearPoint Neuro shares are held by institutional investors. Comparatively, 53.6% of Neuronetics shares are held by institutional investors. 7.0% of ClearPoint Neuro shares are held by company insiders. Comparatively, 8.7% of Neuronetics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for ClearPoint Neuro and Neuronetics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ClearPoint Neuro	0	0	3	0	3.00
Neuronetics	0	1	2	0	2.67

ClearPoint Neuro currently has a consensus price target of $25.00, indicating a potential upside of 106.95%. Neuronetics has a consensus price target of $5.50, indicating a potential upside of 37.84%. Given ClearPoint Neuro’s stronger consensus rating and higher possible upside, equities research analysts clearly believe ClearPoint Neuro is more favorable than Neuronetics.

Valuation and Earnings

This table compares ClearPoint Neuro and Neuronetics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ClearPoint Neuro	$31.39 million	10.77	-$22.09 million	($0.76)	-15.89
Neuronetics	$89.45 million	2.94	-$30.19 million	($1.31)	-3.05

ClearPoint Neuro has higher earnings, but lower revenue than Neuronetics. ClearPoint Neuro is trading at a lower price-to-earnings ratio than Neuronetics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ClearPoint Neuro and Neuronetics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ClearPoint Neuro	-59.64%	-62.10%	-38.39%
Neuronetics	-50.09%	-141.24%	-32.77%

Risk & Volatility

ClearPoint Neuro has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Neuronetics has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500.

About ClearPoint Neuro

ClearPoint Neuro, Inc. operates as a medical device company primarily in the United States. It develops and commercializes platforms for performing minimally invasive surgical procedures in the brain under magnetic resonance imaging guided interventions. The company offers ClearPoint system, an integrated system for the insertion of deep brain stimulation electrodes, biopsy needles, and laser catheters, as well as the infusion of pharmaceuticals into the brain. It has license and collaboration agreement with Clinical Laserthermia Systems AB; license and research agreement with Koninklijke Philips N.V., UCB Biopharma SRL, and University of California and San Francisco; and development and license agreement with NE Scientific, LLC. The company was formerly known as MRI Interventions, Inc. and changed its name to ClearPoint Neuro, Inc. in February 2020. ClearPoint Neuro, Inc. was incorporated in 1998 and is headquartered in Solana Beach, California.

About Neuronetics

Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with neurohealth disorders in the United States and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrists. The company was incorporated in 2001 and is headquartered in Malvern, Pennsylvania.