Cardiovascular Systems (NASDAQ: CSII) and Alliqua Biomedical (NASDAQ:ALQA) are both small-cap 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.

Institutional and Insider Ownership

75.1% of Cardiovascular Systems shares are held by institutional investors. 3.3% of Cardiovascular Systems shares are held by company insiders. Comparatively, 15.8% of Alliqua Biomedical shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Cardiovascular Systems has a beta of 2.52, meaning that its stock price is 152% more volatile than the S&P 500. Comparatively, Alliqua Biomedical has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Cardiovascular Systems and Alliqua Biomedical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cardiovascular Systems -0.93% 0.74% 0.47%
Alliqua Biomedical -155.55% -110.42% -65.28%

Earnings & Valuation

This table compares Cardiovascular Systems and Alliqua Biomedical’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cardiovascular Systems $204.91 million 4.12 -$1.79 million ($0.06) -412.10
Alliqua Biomedical $18.24 million 0.55 -$28.24 million ($9.86) -0.20

Cardiovascular Systems has higher revenue and earnings than Alliqua Biomedical. Cardiovascular Systems is trading at a lower price-to-earnings ratio than Alliqua Biomedical, 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 Cardiovascular Systems and Alliqua Biomedical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cardiovascular Systems 1 3 1 0 2.00
Alliqua Biomedical 0 0 3 0 3.00

Cardiovascular Systems currently has a consensus price target of $31.50, indicating a potential upside of 27.38%. Alliqua Biomedical has a consensus price target of $14.17, indicating a potential upside of 604.81%. Given Alliqua Biomedical’s stronger consensus rating and higher possible upside, analysts plainly believe Alliqua Biomedical is more favorable than Cardiovascular Systems.

Summary

Cardiovascular Systems beats Alliqua Biomedical on 9 of the 13 factors compared between the two stocks.

About Cardiovascular Systems

Cardiovascular Systems, Inc. is a medical technology company. The Company is engaged in treating patients suffering from peripheral and coronary artery diseases, including those with arterial calcium. The Company develops an orbital atherectomy technology for both peripheral and coronary commercial applications. Its peripheral artery disease (PAD) systems are catheter-based platforms capable of treating a range of plaque types in leg arteries both above and below the knee. Its products include Diamondback 360 Peripheral Orbital Atherectomy System (OAS) (Diamondback 360 Peripheral), the Stealth 360 OAS (Stealth 360), Diamondback 360 Peripheral, Diamondback 360 60cm Peripheral, Diamondback 360 Low Profile Peripheral, Diamondback 360 1.50 Peripheral and Diamondback 360 2.00 Peripheral. The Company’s coronary arterial disease (CAD) product, Diamondback 360 Coronary OAS (Coronary OAS), is marketed as a treatment for severely calcified coronary arteries.

About Alliqua Biomedical

Alliqua BioMedical, Inc. is a provider of advanced wound care solutions. The Company’s businesses include advanced wound care and contract manufacturing. The Company operates through its subsidiaries, such as AquaMed Technologies, Inc. and Choice Therapeutics, Inc. The Company is engaged in developing a suite of advanced wound care solutions that will enable surgeons, clinicians and wound care practitioners to address the challenges in chronic and acute wounds. The Company utilizes hydrogel technology through which hydrogels are manufactured by introducing a hydrophilic polymer into water to create a feed mix. The Company’s commercial wound care portfolio consists of over four product categories, such as Human Biologics; Antimicrobial Protection; Exudate Management and Contract Manufacturing. Human Biologics include BIOVANCE and Extracellular Matrix (ECM). Under Antimicrobial Protection, the Company offers SilverSeal.

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