Critical Analysis: Spectral AI (NASDAQ:MDAI) vs. DexCom (NASDAQ:DXCM)

DexCom (NASDAQ:DXCM) and Spectral AI (NASDAQ:MDAI) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Volatility & Risk

DexCom has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Spectral AI has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Earnings & Valuation

This table compares DexCom and Spectral AI”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DexCom	$4.30 billion	6.24	$576.20 million	$1.44	47.52
Spectral AI	$29.58 million	2.33	-$15.31 million	($0.69)	-3.74

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

Insider and Institutional Ownership

97.8% of DexCom shares are owned by institutional investors. Comparatively, 67.1% of Spectral AI shares are owned by institutional investors. 0.3% of DexCom shares are owned by company insiders. Comparatively, 30.7% of Spectral AI shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for DexCom and Spectral AI, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DexCom	0	6	14	3	2.87
Spectral AI	1	0	1	0	2.00

DexCom currently has a consensus price target of $97.00, suggesting a potential upside of 41.75%. Spectral AI has a consensus price target of $3.50, suggesting a potential upside of 35.66%. Given DexCom’s stronger consensus rating and higher probable upside, equities analysts plainly believe DexCom is more favorable than Spectral AI.

Profitability

This table compares DexCom and Spectral AI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DexCom	13.29%	30.41%	10.08%
Spectral AI	-51.97%	N/A	-8.69%

Summary

DexCom beats Spectral AI on 14 of the 15 factors compared between the two stocks.

About DexCom

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include Dexcom G6 and Dexcom G7, integrated CGM systems for diabetes management; Dexcom Share, a remote monitoring system; Dexcom Real-Time API, which enables authorized third-party software developers to integrate real-time CGM data into their digital health apps and devices; and Dexcom ONE, that is designed to replace finger stick blood glucose testing for diabetes treatment decisions. It has also submitted FDA review for Dexcom Stelo for people with type 2 diabetes. The company has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop blood-based or interstitial glucose monitoring products. It markets its products directly to endocrinologists, physicians, and diabetes educators. The company was incorporated in 1999 and is headquartered in San Diego, California.

About Spectral AI

Spectral AI, Inc., an artificial intelligence (AI) company, focuses on developing predictive medical diagnostics in the United States. The company develops medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView System, a predictive analytics platform integrated with the predictive AI-Burn, which combines AI algorithms and multispectral imaging (MSI) imaging for an assessment of wound healing potential and offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention; and DeepView SnapShot M, a handheld, portable, and wireless diagnostic tool, that provides a potential enhanced and expanded use for the government and emergency care, first responders, and potentially home health care professionals. The company is headquartered in Dallas, Texas.