Critical Review: Catasys (CATS) vs. American Caresource (GNOW)

Catasys (NASDAQ:CATS) and American Caresource (OTCMKTS:GNOW) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for Catasys and American Caresource, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Catasys 0 0 1 0 3.00
American Caresource 0 0 0 0 N/A

Catasys presently has a consensus target price of $15.00, indicating a potential upside of 41.51%. Given Catasys’ higher possible upside, analysts plainly believe Catasys is more favorable than American Caresource.

Institutional and Insider Ownership

11.1% of Catasys shares are held by institutional investors. 73.8% of Catasys shares are held by insiders. Comparatively, 51.5% of American Caresource shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Catasys has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500. Comparatively, American Caresource has a beta of 2.66, suggesting that its share price is 166% more volatile than the S&P 500.

Profitability

This table compares Catasys and American Caresource’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Catasys -122.75% N/A -231.14%
American Caresource N/A N/A N/A

Earnings & Valuation

This table compares Catasys and American Caresource’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Catasys $7.72 million 22.16 -$13.60 million ($0.85) -12.47
American Caresource N/A N/A N/A N/A N/A

American Caresource has lower revenue, but higher earnings than Catasys.

Summary

Catasys beats American Caresource on 5 of the 8 factors compared between the two stocks.

About Catasys

Catasys, Inc. provides big data predictive analytics, artificial intelligence and telehealth, combined with human intervention services to health plans and other third party payors. It offers OnTrak solution to improve treatment outcomes and lower the utilization of medical and behavioral health plan services. The company's OnTrak solution includes medical and psychosocial interventions; and a proprietary Web based clinical information platform and database, psychosocial programs, and integrated care coaching services. Its OnTrak solution combines medical and psychosocial treatments with elements of traditional disease management, case management, and ongoing member support to help organizations treat and manage populations struggling with substance dependence, depression, and anxiety to improve their health and thereby decrease their health care costs. Catasys, Inc.'s OnTrak solution includes various components, such as identification of impactable members, member engagement, enrollment/referral, provider network, outpatient medical treatment, outpatient psychosocial treatment, care coaching, monitoring and reporting, and proprietary Web-based clinical information platform. The company was formerly known as Hythiam, Inc. and changed its name to Catasys, Inc. in March 2011. Catasys, Inc. was founded in 2000 and is based in Los Angeles, California.

About American Caresource

American CareSource Holdings, Inc. provides urgent and primary care services in the United States. The company operates healthcare centers that offer non-life-threatening out-patient medical care for the treatment of acute, episodic, and chronic medical conditions. Its healthcare centers provide treatment of general medical problems, including colds, flus, ear infections, hypertension, asthma, pneumonia, urinary tract infections, and other conditions; treatment of injuries, such as fractures, dislocations, sprains, bruises, and cuts; minor non-emergent surgical procedures; diagnostic tests, such as X-rays, electrocardiograms, complete blood counts, and urinalyses; and occupational and industrial medical services, including drug testing, workers' compensation cases, and pre-employment physical examinations. It owns and operates 13 urgent and primary care centers, including 2 in Georgia, 2 in Florida, 3 in Alabama, 4 in North Carolina, and 2 in Virginia. The company was founded in 1995 and is headquartered in Atlanta, Georgia.

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