Novocure (NASDAQ:NVCR) and Tandem Diabetes Care (NASDAQ:TNDM) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.
Profitability
This table compares Novocure and Tandem Diabetes Care's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Novocure | 2.88% | 5.14% | 2.41% |
| Tandem Diabetes Care | -10.29% | -12.88% | -6.83% |
Valuation and Earnings
This table compares Novocure and Tandem Diabetes Care's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Novocure | $351.32 million | 37.97 | $-7,230,000.00 | ($0.07) | -1,884.86 |
| Tandem Diabetes Care | $362.30 million | 19.63 | $-24,750,000.00 | ($0.22) | -530.68 |
Novocure has higher earnings, but lower revenue than Tandem Diabetes Care. Novocure is trading at a lower price-to-earnings ratio than Tandem Diabetes Care, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and target prices for Novocure and Tandem Diabetes Care, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Novocure | 1 | 5 | 4 | 0 | 2.30 |
| Tandem Diabetes Care | 0 | 4 | 10 | 0 | 2.71 |
Novocure currently has a consensus price target of $90.6667, indicating a potential downside of 31.28%. Tandem Diabetes Care has a consensus price target of $113.8571, indicating a potential downside of 2.48%. Given Tandem Diabetes Care's stronger consensus rating and higher possible upside, analysts plainly believe Tandem Diabetes Care is more favorable than Novocure.
Volatility & Risk
Novocure has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500. Comparatively, Tandem Diabetes Care has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.
Insider and Institutional Ownership
67.6% of Novocure shares are owned by institutional investors. 5.1% of Novocure shares are owned by company insiders. Comparatively, 6.0% of Tandem Diabetes Care shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
Novocure beats Tandem Diabetes Care on 9 of the 14 factors compared between the two stocks.
