Analyzing Tenon Medical (NASDAQ:TNON) & Neuronetics (NASDAQ:STIM)

Tenon Medical (NASDAQ:TNON) and Neuronetics (NASDAQ:STIM) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Insider and Institutional Ownership

22.7% of Tenon Medical shares are owned by institutional investors. Comparatively, 53.6% of Neuronetics shares are owned by institutional investors. 4.7% of Tenon Medical shares are owned by insiders. Comparatively, 9.8% of Neuronetics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Tenon Medical has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500. Comparatively, Neuronetics has a beta of 2.26, suggesting that its share price is 126% more volatile than the S&P 500.

Profitability

This table compares Tenon Medical and Neuronetics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tenon Medical	-413.88%	-1,785.88%	-164.26%
Neuronetics	-50.09%	-141.24%	-32.77%

Earnings & Valuation

This table compares Tenon Medical and Neuronetics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tenon Medical	$3.32 million	2.06	-$15.58 million	($27.23)	-0.08
Neuronetics	$72.71 million	0.62	-$30.19 million	($1.23)	-1.21

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tenon Medical and Neuronetics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tenon Medical	0	0	2	0	3.00
Neuronetics	0	1	3	0	2.75

Tenon Medical currently has a consensus target price of $5.50, suggesting a potential upside of 152.29%. Neuronetics has a consensus target price of $4.67, suggesting a potential upside of 213.20%. Given Neuronetics’ higher possible upside, analysts plainly believe Neuronetics is more favorable than Tenon Medical.

Summary

Neuronetics beats Tenon Medical on 10 of the 14 factors compared between the two stocks.

About Tenon Medical

Tenon Medical, Inc., a medical device company, engages in the development of surgical implant systems to treat severe lower back pain in the United States and Puerto Rico. The company offers CATAMARAN SI-Joint Fusion System to fuse sacroiliac joints (SI-Joints) to treat SI-Joint dysfunction that often causes severe lower back pain; and features fixation device that passes through the axial and sagittal planes of the ilium and sacrum, as well as transfixes the SI joints. Tenon Medical, Inc. was incorporated in 2012 and is headquartered in Los Gatos, California.

About Neuronetics

Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with neurohealth disorders in the United States and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrists. The company was incorporated in 2001 and is headquartered in Malvern, Pennsylvania.