Brainsway (NASDAQ:BWAY – Get Free Report) and Pulmonx (NASDAQ:LUNG – Get Free Report) are both small-cap healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.
Analyst Recommendations
This is a breakdown of recent recommendations for Brainsway and Pulmonx, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Brainsway | 0 | 2 | 5 | 0 | 2.71 |
| Pulmonx | 1 | 0 | 3 | 0 | 2.50 |
Brainsway currently has a consensus price target of $18.20, indicating a potential upside of 56.36%. Pulmonx has a consensus price target of $7.67, indicating a potential upside of 173.81%. Given Pulmonx’s higher possible upside, analysts plainly believe Pulmonx is more favorable than Brainsway.
Profitability
This table compares Brainsway and Pulmonx’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Brainsway | 15.65% | 12.74% | 8.17% |
| Pulmonx | -47.93% | -98.23% | -35.89% |
Earnings & Valuation
This table compares Brainsway and Pulmonx”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Brainsway | $52.22 million | 8.97 | $7.57 million | $0.44 | 26.45 |
| Pulmonx | $90.50 million | 1.35 | -$54.00 million | ($1.01) | -2.77 |
Brainsway has higher earnings, but lower revenue than Pulmonx. Pulmonx is trading at a lower price-to-earnings ratio than Brainsway, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Brainsway has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Pulmonx has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.
Institutional and Insider Ownership
30.1% of Brainsway shares are held by institutional investors. Comparatively, 91.0% of Pulmonx shares are held by institutional investors. 19.0% of Brainsway shares are held by insiders. Comparatively, 7.5% of Pulmonx shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
Brainsway beats Pulmonx on 11 of the 14 factors compared between the two stocks.
About Brainsway
BrainsWay Ltd. develops and sells noninvasive neurostimulation treatments for mental health disorders in the United States and internationally. It offers Deep Transcranial Magnetic Stimulation platform technology for the treatment of major depressive disorders, anxious depression, obsessive-compulsive disorders, smoking addiction, bipolar disorders, post traumatic stress disorders, schizophrenia, Alzheimer's disease, autism, chronic pain, multiple sclerosis, post stroke rehabilitation, and Parkinson's diseases. The company serves doctors, hospitals, and medical centers in the field of psychiatry. BrainsWay Ltd. was founded in 2003 and is headquartered in Jerusalem, Israel.
About Pulmonx
Pulmonx Corporation, a commercial-stage medical technology company, provides minimally invasive devices for the treatment of chronic obstructive pulmonary diseases. The company offers Zephyr Endobronchial Valve, a solution for the treatment of patients with hyperinflation associated with severe emphysema; and Chartis Pulmonary Assessment System, a balloon catheter and console system with flow and pressure sensors that are used to assess the presence of collateral ventilation. It also offers StratX Lung Analysis Platform, a cloud-based quantitative computed tomography analysis service that offers information on emphysema destruction, fissure completeness, and lobar volume to help identify target lobes for the treatment with Zephyr Valves. The company serves emphysema patients in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company was formerly known as Pulmonx and changed its name to Pulmonx Corporation in December 2013. Pulmonx Corporation was incorporated in 1995 and is headquartered in Redwood City, California.
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