Avita Medical (NASDAQ:RCEL – Get Free Report) and NexGel (NASDAQ:NXGL – Get Free Report) are both small-cap healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.
Institutional & Insider Ownership
27.7% of Avita Medical shares are owned by institutional investors. Comparatively, 2.2% of NexGel shares are owned by institutional investors. 2.2% of Avita Medical shares are owned by company insiders. Comparatively, 19.8% of NexGel shares are owned by company 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.
Profitability
This table compares Avita Medical and NexGel’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Avita Medical | -56.96% | N/A | -78.53% |
| NexGel | -51.26% | -121.18% | -41.15% |
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Avita Medical | $71.61 million | 4.25 | -$48.59 million | ($1.44) | -6.86 |
| NexGel | $11.42 million | 0.25 | -$3.00 million | ($0.71) | -0.41 |
NexGel has lower revenue, but higher earnings than Avita Medical. Avita Medical is trading at a lower price-to-earnings ratio than NexGel, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Avita Medical has a beta of 2.02, indicating that its stock price is 102% more volatile than the S&P 500. Comparatively, NexGel has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Avita Medical and NexGel, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Avita Medical | 1 | 1 | 5 | 0 | 2.57 |
| NexGel | 1 | 1 | 0 | 0 | 1.50 |
Avita Medical presently has a consensus target price of $11.40, indicating a potential upside of 15.38%. NexGel has a consensus target price of $2.00, indicating a potential upside of 587.05%. Given NexGel’s higher probable upside, analysts clearly believe NexGel is more favorable than Avita Medical.
About Avita Medical
AVITA Medical, Inc., together with its subsidiaries, operates as a regenerative medicine company in the United States and internationally. The company's lead product is the RECELL System, a cell harvesting device used for the treatment of thermal burn wounds, full-thickness skin defects, and repigmentation of stable depigmented vitiligo lesions. It develops RECELL GO to control the manual process of disaggregation, filtration, and soak time. The company was formerly known as AVITA Therapeutics, Inc. AVITA Medical, Inc. was incorporated in 2020 and is headquartered in Valencia, California.
About NexGel
NEXGEL, Inc. manufactures high water content, electron beam cross-linked, and aqueous polymer hydrogels and gels. Its products are used for wound care, medical diagnostics, transdermal drug delivery, and cosmetics. The company was formerly known as AquaMed Technologies, Inc. and changed its name to NEXGEL, Inc. in November 2019. The company was incorporated in 2009 and is based in Langhorne, Pennsylvania.
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