Contrasting STERIS (NYSE:STE) and RxSight (NASDAQ:RXST)

RxSight (NASDAQ:RXST) and STERIS (NYSE:STE) are both healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Insider and Institutional Ownership

78.8% of RxSight shares are held by institutional investors. Comparatively, 94.7% of STERIS shares are held by institutional investors. 10.1% of RxSight shares are held by insiders. Comparatively, 1.1% of STERIS shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares RxSight and STERIS”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RxSight	$134.48 million	1.49	-$38.94 million	($1.13)	-4.26
STERIS	$5.94 billion	3.53	$782.30 million	$8.18	26.26

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

Profitability

This table compares RxSight and STERIS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RxSight	-36.80%	-17.35%	-14.70%
STERIS	13.34%	14.34%	9.66%

Volatility and Risk

RxSight has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, STERIS has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for RxSight and STERIS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RxSight	3	7	2	0	1.92
STERIS	0	1	3	0	2.75

RxSight presently has a consensus price target of $8.17, indicating a potential upside of 69.90%. STERIS has a consensus price target of $271.33, indicating a potential upside of 26.32%. Given RxSight’s higher possible upside, analysts plainly believe RxSight is more favorable than STERIS.

Summary

STERIS beats RxSight on 11 of the 14 factors compared between the two stocks.

About RxSight

RxSight, Inc., a commercial-stage medical device company, engages in the research and development, manufacture, and sale of light adjustable intraocular lenses (LAL) used in cataract surgery in the United States and internationally. It offers RxSight system that enables doctors to customize and enhance the visual acuity for patients after cataract surgery. The company's RxSight system includes RxSight Light Adjustable Lens, a special photosensitive material that changes shape and power. RxSight light delivery device, an office-based light treatment device that delivers UV light in a programmed pattern to modify the LAL based on the visual correction needed to achieve desired vision after cataract surgery. It primarily serves cataract doctors. The company was formerly known as Calhoun Vision, Inc. and changed its name to RxSight, Inc. in February 2017. RxSight, Inc. was incorporated in 1997 and is headquartered in Aliso Viejo, California.

About STERIS

STERIS plc provides infection prevention products and services worldwide. It operates through four segments: Healthcare, Applied Sterilization Technologies, Life Sciences, and Dental. The Healthcare segment offers cleaning chemistries and sterility assurance products; automated endoscope reprocessing system and tracking products; endoscopy accessories, washers, sterilizers, and other pieces of capital equipment for the operation of a sterile processing department; and equipment used directly in the operating room, including surgical tables, lights, and connectivity solutions, as well as equipment management services. It also provides capital equipment installation, maintenance, upgradation, repair, and troubleshooting services; preventive maintenance programs and repair services; instrument and endoscope repair and maintenance services; and custom process improvement consulting and outsourced instrument sterile processing services. The Applied Sterilization Technologies segment provides contract sterilization and testing services for medical device and pharmaceutical manufacturers through a network of approximately 50 contract sterilization and laboratory facilities. The Life Sciences segment designs, manufactures and sells consumable products, such as formulated cleaning chemistries, barrier, sterility assurance products, steam and vaporized hydrogen peroxide sterilizers, and washer disinfectors. This segment also offers equipment installation, maintenance, upgradation, repair, and troubleshooting services; and preventive maintenance programs and repair services. The Dental segment provides hand and electric-powered dental instruments, infection control products, conscious sedation, personal protective equipment, and water quality products for dental suite. The company serves its products and services to hospitals, other healthcare providers, and pharmaceutical manufacturers. The company was founded in 1985 and is based in Dublin, Ireland.