Critical Comparison: NovoCure (NASDAQ:NVCR) versus Alpha Tau Medical (NASDAQ:DRTS)

NovoCure (NASDAQ:NVCR) and Alpha Tau Medical (NASDAQ:DRTS) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares NovoCure and Alpha Tau Medical”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NovoCure	$549.96 million	3.28	-$207.04 million	($1.81)	-9.25
Alpha Tau Medical	N/A	N/A	-$29.16 million	($0.41)	-5.37

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for NovoCure and Alpha Tau Medical, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NovoCure	0	2	4	0	2.67
Alpha Tau Medical	0	0	3	0	3.00

NovoCure currently has a consensus target price of $26.17, suggesting a potential upside of 56.31%. Alpha Tau Medical has a consensus target price of $8.00, suggesting a potential upside of 263.64%. Given Alpha Tau Medical’s stronger consensus rating and higher probable upside, analysts clearly believe Alpha Tau Medical is more favorable than NovoCure.

Profitability

This table compares NovoCure and Alpha Tau Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NovoCure	-30.67%	-45.68%	-14.59%
Alpha Tau Medical	N/A	-33.75%	-26.78%

Insider & Institutional Ownership

84.6% of NovoCure shares are held by institutional investors. Comparatively, 2.7% of Alpha Tau Medical shares are held by institutional investors. 6.3% of NovoCure shares are held by insiders. Comparatively, 39.5% of Alpha Tau Medical shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

NovoCure has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Alpha Tau Medical has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Summary

Alpha Tau Medical beats NovoCure on 9 of the 13 factors compared between the two stocks.

About NovoCure

NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of tumor treating fields (TTFields) devices for the treatment of solid tumor cancers in the United States, Germany, Japan, Greater China, and internationally. The company’s TTFields devices include Optune Gio and Optune Lua. It also has ongoing clinical trials investigating TTFields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer, and ovarian cancer. NovoCure Limited was incorporated in 2000 and is headquartered in Saint Helier, Jersey.

About Alpha Tau Medical

Alpha Tau Medical Ltd., a clinical-stage oncology therapeutics company, engages in research, development, and commercialization of diffusing alpha-emitters radiation therapy (Alpha DaRT) for the treatment of solid cancer In Israel and the United States. Its Alpha-DaRT technology used in clinical trials for skin, oral, pancreatic, prostate, and breast cancers; and preclinical studies for brain, hepatic cell carcinoma, glioblastoma multiforme, lung cancer, and others. The company was incorporated in 2015 and is headquartered in Jerusalem, Israel.