Critical Contrast: Modular Medical (NASDAQ:MODD) & OrthoPediatrics (NASDAQ:KIDS)

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

Earnings and Valuation

This table compares Modular Medical and OrthoPediatrics’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Modular Medical	N/A	N/A	-$13.88 million	($0.97)	-1.63
OrthoPediatrics	$148.73 million	4.84	-$20.97 million	($0.92)	-32.89

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

Institutional & Insider Ownership

27.5% of Modular Medical shares are owned by institutional investors. Comparatively, 69.1% of OrthoPediatrics shares are owned by institutional investors. 32.3% of Modular Medical shares are owned by insiders. Comparatively, 31.8% of OrthoPediatrics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Modular Medical has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, OrthoPediatrics has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Profitability

This table compares Modular Medical and OrthoPediatrics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Modular Medical	N/A	-235.93%	-180.37%
OrthoPediatrics	-14.10%	-5.03%	-4.37%

Analyst Ratings

This is a summary of recent ratings for Modular Medical and OrthoPediatrics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Modular Medical	0	0	2	0	3.00
OrthoPediatrics	0	1	3	0	2.75

Modular Medical currently has a consensus price target of $4.25, indicating a potential upside of 168.99%. OrthoPediatrics has a consensus price target of $42.50, indicating a potential upside of 40.45%. Given Modular Medical’s stronger consensus rating and higher possible upside, research analysts plainly believe Modular Medical is more favorable than OrthoPediatrics.

Summary

OrthoPediatrics beats Modular Medical on 7 of the 13 factors compared between the two stocks.

About Modular Medical

Modular Medical, Inc. operates as a development stage medical device company. It focuses on the design, development, and commercialization of insulin pumps. It offers MODD1, a two-part patch pump for diabetes. The company was founded in 1998 and is headquartered in San Diego, California.

About OrthoPediatrics

OrthoPediatrics Corp., a medical device company, engages in designing, developing, and marketing anatomically appropriate implants, instruments, and specialized braces for children with orthopedic conditions in the United States and internationally. The company offers pediatric trauma and deformity correction products; scoliosis procedures for the treatment of spinal deformity; and sports medicine and other products. Its products comprise PediLoc, PediPlates, cannulated screws, PediFlex nail, PediNail, PediLoc Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE Spine, BandLoc, Pediguard, Pediatric Nailing Platform | Femur, Devise Rail, Orthex, The Fassier-Duval Telescopic Intramedullary System, SLIMTM Nail, The GAP Nail, The Free Gliding SCFE Screw System, GIROTM Growth Modulation System, PNP Tibia System, ApiFix Mid-C System, and Mitchell Ponseti. The company serves pediatric orthopedic market, as well as pediatric orthopedic surgeons and caregivers. OrthoPediatrics Corp. was founded in 2006 and is headquartered in Warsaw, Indiana.