Comparing Novadaq Technologies (NVDQ) & NxStage Medical (NXTM)

Novadaq Technologies (NASDAQ: NVDQ) and NxStage Medical (NASDAQ:NXTM) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Insider and Institutional Ownership

86.5% of Novadaq Technologies shares are owned by institutional investors. Comparatively, 91.8% of NxStage Medical shares are owned by institutional investors. 4.7% of NxStage Medical shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Novadaq Technologies and NxStage Medical, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novadaq Technologies 0 11 2 0 2.15
NxStage Medical 0 7 0 0 2.00

Novadaq Technologies currently has a consensus price target of $11.86, suggesting a potential upside of 2.48%. NxStage Medical has a consensus price target of $29.83, suggesting a potential upside of 2.03%. Given Novadaq Technologies’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Novadaq Technologies is more favorable than NxStage Medical.

Profitability

This table compares Novadaq Technologies and NxStage Medical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novadaq Technologies -66.61% -51.89% -40.92%
NxStage Medical -1.33% -2.43% -1.56%

Risk & Volatility

Novadaq Technologies has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, NxStage Medical has a beta of 0.08, indicating that its share price is 92% less volatile than the S&P 500.

Earnings and Valuation

This table compares Novadaq Technologies and NxStage Medical’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novadaq Technologies $83.87 million 7.98 -$50.47 million ($0.96) -12.05
NxStage Medical $378.01 million 5.11 $14.26 million ($0.07) -417.71

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

Summary

NxStage Medical beats Novadaq Technologies on 8 of the 13 factors compared between the two stocks.

About Novadaq Technologies

NOVADAQ Technologies Inc. is a medical device company. The Company primarily develops, manufactures and markets real-time fluorescence imaging products that are designed for use by surgeons in the operating room and other clinical settings where open and minimally invasive surgery or interventional procedures are performed. The Company’s SPY fluorescence imaging technology platform (SPY Fluorescence Imaging) provides clinically relevant anatomic and physiologic images of blood flow in vessels and micro-vessels during a range of surgical and outpatient procedures performed in the operating room or clinic. The SPY Fluorescence Imaging platform can be used to develop imaging devices specifically designed to meet the needs of different surgeons and other healthcare providers and the specialty procedures they perform. SPY images enable physicians treating life-threatening illnesses, such as breast, head and neck, colon, complex hernias, diabetes and certain cardiovascular diseases.

About NxStage Medical

NxStage Medical, Inc. is a medical technology company. The Company develops, manufactures and markets products and services for patients suffering from chronic or acute kidney failure. It operates through three segments. The System One segment includes revenues from the sale and rental of the System One and PureFlow SL dialysate preparation equipment and the sale of disposable products in the home and critical care markets. The In-Center segment includes revenues from the sale of blood tubing sets and needles for hemodialysis, primarily for the treatment of end-stage renal disease patients at dialysis clinics, and needles for apheresis. It markets extracorporeal disposable products under the Medisystems brand. The Services segment includes revenues from dialysis services provided to patients at its NxStage Kidney Care dialysis centers. Its product offerings include Home Dialysis, Next-Generation Hemodialysis System, Critical Care, Next-Generation Critical Care System and In-Center.

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