Lombard Medical (NASDAQ: EVAR) and K2M Group Holdings (NASDAQ:KTWO) are both small-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Valuation and Earnings

This table compares Lombard Medical and K2M Group Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lombard Medical $12.17 million 0.99 -$24.22 million ($1.54) -0.28
K2M Group Holdings $248.68 million 3.39 -$2.00 million ($0.96) -20.28

K2M Group Holdings has higher revenue and earnings than Lombard Medical. K2M Group Holdings is trading at a lower price-to-earnings ratio than Lombard Medical, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

40.2% of Lombard Medical shares are owned by institutional investors. Comparatively, 97.8% of K2M Group Holdings shares are owned by institutional investors. 5.8% of K2M Group Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Lombard Medical has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, K2M Group Holdings has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Profitability

This table compares Lombard Medical and K2M Group Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lombard Medical N/A N/A N/A
K2M Group Holdings -16.21% -15.45% -10.50%

Analyst Ratings

This is a breakdown of current ratings and target prices for Lombard Medical and K2M Group Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lombard Medical 0 0 0 0 N/A
K2M Group Holdings 0 0 8 1 3.11

K2M Group Holdings has a consensus price target of $25.88, suggesting a potential upside of 32.90%. Given K2M Group Holdings’ higher possible upside, analysts plainly believe K2M Group Holdings is more favorable than Lombard Medical.

Summary

K2M Group Holdings beats Lombard Medical on 10 of the 13 factors compared between the two stocks.

Lombard Medical Company Profile

Lombard Medical, Inc. is a medical technology company. The Company specializes in developing, manufacturing, and marketing endovascular stent-grafts that address medical needs in the repair of aortic aneurysms. The Company’s Aorfix is an abdominal aortic aneurysm (AAA) stent-graft for the treatment of AAAs with angulation at the neck of the aneurysm of over 90 degrees. The Company supplies Aorfix pre-loaded into a delivery system, Aorflex, which is designed for accurate placement of Aorfix in the abdominal aorta. Once Aorfix is properly placed within the abdominal aorta, it provides a conduit for blood flow, thereby relieving pressure within the weakened or aneurysmal section of the vessel wall, which reduces the potential for the AAA to rupture. It also offers IntelliFlex, which is a delivery system technology created for Aorfix AAA stent graft, and Altura Endovascular Stent Graft System that offers a simple and predictable solution to the treatment of standard AAA anatomies.

K2M Group Holdings Company Profile

K2M Group Holdings, Inc. is a medical device company focused on designing, developing and commercializing spine and minimally invasive technologies and techniques. The Company’s solutions are focused on achieving three-dimensional Total Body Balance. Its spine products are used by spine surgeons to treat spinal pathologies, such as deformity (primarily scoliosis), trauma and tumor. Its products consist of implants, disposables and instruments, which are marketed and sold primarily to hospitals for use by spine surgeons. As of December 31, 2016, its product portfolio consisted of 83 product lines that are used in complex spine, minimally invasive surgery (MIS) and degenerative surgeries. Its technologies include EVEREST, MESA, Rail 4D, Quicket Deformity, CASCADIA, CAPRI, SERENGETI, RAVINE and tifix. Its degenerative spine technologies are used to treat degenerative spine disorders and include products, such as cervical, thoracic and lumbar spinal fusion devices and interbody devices.

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