Contrasting Nephros (NASDAQ:NEPH) and Hyperfine (NASDAQ:HYPR)

Hyperfine (NASDAQ:HYPR) and Nephros (NASDAQ:NEPH) are both small-cap healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

15.0% of Hyperfine shares are owned by institutional investors. Comparatively, 41.1% of Nephros shares are owned by institutional investors. 26.3% of Hyperfine shares are owned by company insiders. Comparatively, 8.3% of Nephros shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hyperfine and Nephros, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hyperfine	1	1	3	0	2.40
Nephros	0	3	1	0	2.25

Hyperfine presently has a consensus price target of $2.02, suggesting a potential upside of 158.09%. Nephros has a consensus price target of $4.00, suggesting a potential upside of 26.18%. Given Hyperfine’s stronger consensus rating and higher probable upside, research analysts clearly believe Hyperfine is more favorable than Nephros.

Profitability

This table compares Hyperfine and Nephros’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hyperfine	-210.75%	-97.88%	-61.81%
Nephros	8.38%	10.60%	8.05%

Valuation & Earnings

This table compares Hyperfine and Nephros”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hyperfine	$16.54 million	5.03	-$35.57 million	($0.38)	-2.06
Nephros	$20.72 million	1.66	$1.19 million	$0.16	19.81

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

Risk & Volatility

Hyperfine has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500. Comparatively, Nephros has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500.

Summary

Nephros beats Hyperfine on 9 of the 14 factors compared between the two stocks.

About Hyperfine

Hyperfine, Inc., a medical device company, provides magnetic resonance imaging (MRI) products in the United States. The company offers Swoop Portable MR imaging system, which offers portable brain neuroimaging; and support and technical assistance services. It serves ICU, comprehensive, and primary stroke accredited facilities through direct sales and distributors. Hyperfine, Inc. was founded in 2014 and is based in Guilford, Connecticut.

About Nephros

Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also manufactures and sells water filters that enhance the taste and odor of water, as well as reduce biofilm, cysts, particulates, and scale build-up in downstream equipment. It markets its products to food service, hospitality, convenience store, and health care markets, as well as medical institutions. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.