Contrasting Neuronetics (NASDAQ:STIM) & Westaim (NASDAQ:WEDXF)

Neuronetics (NASDAQ:STIM) and Westaim (OTCMKTS:WEDXF) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Neuronetics and Westaim, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neuronetics 0 0 5 0 3.00
Westaim 0 0 0 0 N/A



Neuronetics currently has a consensus price target of $32.25, indicating a potential upside of 157.38%. Given Neuronetics’ higher probable upside, analysts clearly believe Neuronetics is more favorable than Westaim.

Profitability

This table compares Neuronetics and Westaim’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neuronetics -47.21% -1,385.60% -27.67%
Westaim 441.44% 6.16% 5.30%

Dividends

Westaim pays an annual dividend of $0.10 per share and has a dividend yield of 4.7%. Neuronetics does not pay a dividend.

Insider and Institutional Ownership

80.6% of Neuronetics shares are owned by institutional investors. 12.0% of Neuronetics shares are owned by company insiders. Comparatively, 4.2% of Westaim shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Neuronetics and Westaim’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Neuronetics $52.78 million 4.35 -$24.10 million ($2.69) -4.66
Westaim $4.50 million 67.31 $16.79 million N/A N/A

Westaim has lower revenue, but higher earnings than Neuronetics.

Summary

Westaim beats Neuronetics on 7 of the 12 factors compared between the two stocks.

Neuronetics Company Profile

Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with psychiatric disorders in the United States, Japan, and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrist customers. Neuronetics, Inc. was founded in 2003 and is headquartered in Malvern, Pennsylvania.

Westaim Company Profile

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.

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