Critical Analysis: Nephros (NASDAQ:NEPH) vs. Aethlon Medical (NASDAQ:AEMD)

Aethlon Medical (NASDAQ:AEMD) and Nephros (NASDAQ:NEPH) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Risk & Volatility

Aethlon Medical has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500. Comparatively, Nephros has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Earnings & Valuation

This table compares Aethlon Medical and Nephros”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aethlon Medical	$570,000.00	10.91	-$12.21 million	($1.58)	-0.27
Nephros	$14.16 million	1.15	-$1.58 million	($0.09)	-17.22

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Aethlon Medical and Nephros, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aethlon Medical	0	0	1	0	3.00
Nephros	0	0	1	0	3.00

Aethlon Medical currently has a consensus price target of $7.00, indicating a potential upside of 1,527.91%. Nephros has a consensus price target of $5.00, indicating a potential upside of 222.58%. Given Aethlon Medical’s higher probable upside, research analysts plainly believe Aethlon Medical is more favorable than Nephros.

Profitability

This table compares Aethlon Medical and Nephros’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aethlon Medical	N/A	-153.96%	-109.13%
Nephros	-6.86%	-11.39%	-8.30%

Insider & Institutional Ownership

2.0% of Aethlon Medical shares are held by institutional investors. Comparatively, 41.1% of Nephros shares are held by institutional investors. 1.1% of Aethlon Medical shares are held by company insiders. Comparatively, 4.1% of Nephros shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Nephros beats Aethlon Medical on 7 of the 12 factors compared between the two stocks.

About Aethlon Medical

Aethlon Medical, Inc., a medical therapeutic company, focuses on developing products to treat cancer and life-threatening infectious diseases in the United States. It develops Hemopurifier, a clinical-stage immunotherapeutic device that removes tumor-derived exosomes and life-threatening viruses and use in organ transplantation. The company was incorporated in 1999 and is based in San Diego, California.

About Nephros

Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also manufactures and sells water filters that enhance the taste and odor of water, as well as reduce biofilm, cysts, particulates, and scale build-up in downstream equipment. It markets its products to food service, hospitality, convenience store, and health care markets, as well as medical institutions. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.