Head to Head Analysis: Avanos Medical (NYSE:AVNS) & NeuroPace (NASDAQ:NPCE)

Avanos Medical (NYSE:AVNS) and NeuroPace (NASDAQ:NPCE) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Earnings and Valuation

This table compares Avanos Medical and NeuroPace”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avanos Medical	$687.80 million	0.72	-$392.10 million	($10.07)	-1.07
NeuroPace	$79.91 million	4.26	-$27.14 million	($0.84)	-12.24

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

Profitability

This table compares Avanos Medical and NeuroPace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avanos Medical	-66.89%	6.16%	4.57%
NeuroPace	-29.29%	-168.61%	-25.48%

Risk & Volatility

Avanos Medical has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, NeuroPace has a beta of 1.91, meaning that its share price is 91% more volatile than the S&P 500.

Insider and Institutional Ownership

95.2% of Avanos Medical shares are owned by institutional investors. Comparatively, 78.8% of NeuroPace shares are owned by institutional investors. 2.6% of Avanos Medical shares are owned by company insiders. Comparatively, 20.5% of NeuroPace shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Avanos Medical and NeuroPace, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avanos Medical	1	1	0	0	1.50
NeuroPace	1	1	5	0	2.57

NeuroPace has a consensus target price of $16.60, indicating a potential upside of 61.48%. Given NeuroPace’s stronger consensus rating and higher possible upside, analysts clearly believe NeuroPace is more favorable than Avanos Medical.

Summary

NeuroPace beats Avanos Medical on 9 of the 14 factors compared between the two stocks.

About Avanos Medical

Avanos Medical, Inc., a medical technology company, offers medical device solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It offers a portfolio of chronic care products that include digestive health products, such as Mic-Key enteral feeding tubes, Corpak patient feeding solutions, and NeoMed neonatal and pediatric feeding solutions. The company also provides a portfolio of non-opioid pain solutions, including surgical pain and recovery products, such as ON-Q and ambIT surgical pain pumps, Game Ready cold, and compression therapy systems. In addition, it offers interventional pain solutions, which offers minimally invasive pain-relieving therapies, such as Coolief pain relief therapy; OrthogenRx's knee osteoarthritis hyaluronic acid pain relief injection products; and Trident radiofrequency ablation products to treat chronic pain conditions. It markets its products directly to hospitals and other healthcare providers, healthcare facilities, and other end-user customers, as well as through third-party wholesale distributors. The company was formerly known as Halyard Health, Inc. and changed its name to Avanos Medical, Inc. in June 2018. Avanos Medical, Inc. was incorporated in 2014 and is headquartered in Alpharetta, Georgia.

About NeuroPace

NeuroPace, Inc. operates as a medical device company in the United States. The company develops RNS system, a brain-responsive neuromodulation system that delivers personalized, real-time treatment at the seizure source for treating medically refractory focal epilepsy. It also records continuous brain activity data and enables clinicians to monitor patients in person and remotely. Its RNS System includes RNS neurostimulator, cortical strip and depth leads, and Patient Remote Monitor, as well as other implantable and non-implantable accessories. The company sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures. NeuroPace, Inc. was incorporated in 1997 and is headquartered in Mountain View, California.