Establishment Labs (NASDAQ:ESTA) and Avanos Medical (NYSE:AVNS) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.
Profitability
This table compares Establishment Labs and Avanos Medical's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Establishment Labs | -46.40% | -49.51% | -24.21% |
| Avanos Medical | 1.93% | 3.20% | 2.28% |
Analyst Recommendations
This is a breakdown of recent ratings for Establishment Labs and Avanos Medical, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Establishment Labs | 0 | 1 | 3 | 0 | 2.75 |
| Avanos Medical | 1 | 0 | 1 | 0 | 2.00 |
Establishment Labs currently has a consensus target price of $46.00, indicating a potential downside of 36.54%. Avanos Medical has a consensus target price of $50.00, indicating a potential upside of 11.11%. Given Avanos Medical's higher probable upside, analysts plainly believe Avanos Medical is more favorable than Establishment Labs.
Earnings and Valuation
This table compares Establishment Labs and Avanos Medical's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Establishment Labs | $89.57 million | 19.17 | $-38,150,000.00 | ($1.86) | -38.97 |
| Avanos Medical | $697.60 million | 3.11 | $-45,900,000.00 | $1.07 | 42.17 |
Establishment Labs has higher earnings, but lower revenue than Avanos Medical. Establishment Labs is trading at a lower price-to-earnings ratio than Avanos Medical, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
54.8% of Establishment Labs shares are held by institutional investors. Comparatively, 94.8% of Avanos Medical shares are held by institutional investors. 2.6% of Establishment Labs shares are held by insiders. Comparatively, 1.5% of Avanos Medical shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Volatility & Risk
Establishment Labs has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Avanos Medical has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.
Summary
Avanos Medical beats Establishment Labs on 8 of the 14 factors compared between the two stocks.
