Neuronetics (NASDAQ:STIM – Get Free Report) and Neogen (NASDAQ:NEOG – Get Free Report) are both healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
Insider and Institutional Ownership
53.6% of Neuronetics shares are owned by institutional investors. Comparatively, 96.7% of Neogen shares are owned by institutional investors. 8.4% of Neuronetics shares are owned by insiders. Comparatively, 0.5% of Neogen shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Neuronetics and Neogen”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Neuronetics | $155.10 million | 1.05 | -$39.00 million | ($0.44) | -4.86 |
| Neogen | $870.40 million | 2.93 | -$7.90 million | ($0.03) | -390.33 |
Neogen has higher revenue and earnings than Neuronetics. Neogen 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 Neuronetics and Neogen’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Neuronetics | -19.62% | -125.11% | -22.15% |
| Neogen | -6.35% | 3.29% | 2.06% |
Volatility and Risk
Neuronetics has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Neogen has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Neuronetics and Neogen, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Neuronetics | 1 | 0 | 4 | 0 | 2.60 |
| Neogen | 1 | 1 | 3 | 0 | 2.40 |
Neuronetics currently has a consensus price target of $4.67, indicating a potential upside of 118.07%. Neogen has a consensus price target of $12.67, indicating a potential upside of 8.17%. Given Neuronetics’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Neuronetics is more favorable than Neogen.
Summary
Neogen beats Neuronetics on 9 of the 14 factors compared between the two stocks.
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.
About Neogen
Neogen Corporation, together with its subsidiaries, engages in the development, manufacture, and marketing of various products and services dedicated to food and animal safety worldwide. It operates through two segments, Food Safety and Animal Safety. The Food Safety segment offers diagnostic test kits and related products to detect dangerous and unintended substances in food and animal feed, including foodborne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, ruminant by-products, meat speciation, drug residues, pesticide residues, and general sanitation concerns; and AccuPoint Advanced rapid sanitation test to detect the presence of adenosine triphosphate, a chemical found in living cells, as well as provides genomics-based diagnostic technology and software systems that help testers to objectively analyze and store their results and perform analysis on the results from multiple locations over extended periods. The segment offers its products primarily to milling and grain, meat and poultry, prepared foods and ingredients, fruits and vegetables, seafood, dairy, beverage, water, healthcare, traditional culture media markets, food service, and dietary supplements markets. The Animal Safety segment provides veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodent control products, cleaners, disinfectants, insect control products, and genomics testing services marketed through veterinarians, retailers, livestock producers, and animal health product distributors, for the animal safety market. The segment offers its products for companion animal veterinarians; livestock producers, veterinarians, and breed associations; retailers; breeding and genetics companies; diagnostic labs and universities; distributors; and other manufacturers and government agencies. Neogen Corporation was incorporated in 1981 and is headquartered in Lansing, Michigan.
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