Financial Contrast: ArthroCare (ARTC) and Biolase (BIOL)

ArthroCare (NASDAQ: ARTC) and Biolase (NASDAQ:BIOL) are both healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

38.8% of Biolase shares are owned by institutional investors. 7.1% of Biolase shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ArthroCare and Biolase, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArthroCare 0 0 0 0 N/A
Biolase 0 0 1 0 3.00

Biolase has a consensus target price of $2.50, indicating a potential upside of 481.40%.

Profitability

This table compares ArthroCare and Biolase’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ArthroCare N/A N/A N/A
Biolase -36.28% -74.51% -40.81%

Valuation & Earnings

This table compares ArthroCare and Biolase’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ArthroCare N/A N/A N/A $0.40 N/A
Biolase $51.81 million 0.63 -$15.37 million ($0.33) -1.30

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

ArthroCare Company Profile

ArthroCare Corporation (ArthroCare) is a medical device company. ArthroCare develops and manufactures surgical devices, instruments, and implants. Its devices enable surgical procedures and enable new minimally invasive procedures. Many of ArthroCare’s devices use its Coblation technology. This technology dissolves target tissue and limits damage to surrounding healthy tissue. ArthroCare also develops surgical devices utilizing other patented technology, including its OPUS line of fixation products, as well as re-usable surgical instruments. ArthroCare’s two core product consists of sports medicine and ear, nose, and throat (ENT), as well as other areas, such as spine, wound care, urology and gynecology. It’s Sports Medicine, ENT and other products are marketed and sold through two principal geographic distribution channels: Americas (North and South America) and International (all other geographies). In May 2014, Smith & Nephew PLC acquired the Company.

Biolase Company Profile

BIOLASE, Inc. (BIOLASE) is a medical device company that develops, manufactures, markets and sells laser systems in dentistry and medicine. The Company markets, sells, and distributes dental imaging equipment, including cone beam digital x-rays and computer-aided design (CAD)/computer-aided manufacturing (CAM) intra-oral scanners, in-office, chair-side milling machines and three-dimensional (3-D) printers. It offers two categories of laser system products: WaterLase (all-tissue) systems and Diode (soft tissue) systems. Its brand, WaterLase, uses a combination of water and laser energy to perform procedures performed using drills, scalpels, and other traditional dental instruments for cutting soft and hard tissue. It also offers its Diode laser systems to perform soft tissue, pain therapy, and cosmetic procedures, including teeth whitening. Its Waterlase and Diode systems use disposable laser tips of differing sizes and shapes depending on the procedures being performed.

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