Spectral AI (NASDAQ:MDAI) & DarioHealth (NASDAQ:DRIO) Critical Review

DarioHealth (NASDAQ:DRIO) and Spectral AI (NASDAQ:MDAI) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Insider & Institutional Ownership

33.4% of DarioHealth shares are owned by institutional investors. Comparatively, 67.1% of Spectral AI shares are owned by institutional investors. 3.5% of DarioHealth shares are owned by insiders. Comparatively, 30.7% of Spectral AI shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for DarioHealth and Spectral AI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DarioHealth	1	1	2	0	2.25
Spectral AI	1	0	2	0	2.33

DarioHealth currently has a consensus target price of $38.00, indicating a potential upside of 224.23%. Spectral AI has a consensus target price of $3.25, indicating a potential upside of 109.68%. Given DarioHealth’s higher probable upside, analysts plainly believe DarioHealth is more favorable than Spectral AI.

Profitability

This table compares DarioHealth and Spectral AI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DarioHealth	-171.09%	-59.47%	-36.75%
Spectral AI	-70.64%	N/A	-27.57%

Valuation & Earnings

This table compares DarioHealth and Spectral AI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DarioHealth	$27.04 million	2.93	-$42.75 million	($11.16)	-1.05
Spectral AI	$29.58 million	1.61	-$15.31 million	($0.74)	-2.09

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

Volatility and Risk

DarioHealth has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Spectral AI has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Summary

Spectral AI beats DarioHealth on 9 of the 13 factors compared between the two stocks.

About DarioHealth

DarioHealth Corp. operates as a digital health company in the United States, Canada, the European Union, Australia, and New Zealand. Its digital therapeutics platform and suite of solutions deliver personalized and dynamic interventions driven by data analytics and one-on-one coaching for diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health. The company offers Dario Evolve, a metabolic solution to address metabolic health needs, such as diabetes, pre-diabetes, hypertension, and weight management; Dario Move, which address most common musculoskeletal conditions; Dario Elevate, a behavioral health solution that optimizes access to evidence-based care; and Dario One, a full suite of chronic condition management solution; and Dario blood glucose monitoring systems. It also provides native devices, such as glucose meter, blood pressure cuff, digital scale, and biofeedback sensor device, as well as live coaching services. The company was formerly known as LabStyle Innovations Corp. and changed its name to DarioHealth Corp. in July 2016. DarioHealth Corp. was incorporated in 2011 and is based in New York, New York.

About Spectral AI

Spectral AI, Inc., an artificial intelligence (AI) company, focuses on developing predictive medical diagnostics in the United States. The company develops medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView System, a predictive analytics platform integrated with the predictive AI-Burn, which combines AI algorithms and multispectral imaging (MSI) imaging for an assessment of wound healing potential and offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention; and DeepView SnapShot M, a handheld, portable, and wireless diagnostic tool, that provides a potential enhanced and expanded use for the government and emergency care, first responders, and potentially home health care professionals. The company is headquartered in Dallas, Texas.