Pacific Biosciences of California (NASDAQ: PACB) and Viewray (NASDAQ:VRAY) are both small-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Valuation and Earnings

This table compares Pacific Biosciences of California and Viewray’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Biosciences of California $90.71 million 3.23 -$74.37 million ($0.91) -2.77
Viewray $22.24 million 30.73 -$50.63 million ($1.09) -9.28

Viewray has lower revenue, but higher earnings than Pacific Biosciences of California. Viewray is trading at a lower price-to-earnings ratio than Pacific Biosciences of California, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

70.5% of Pacific Biosciences of California shares are owned by institutional investors. Comparatively, 50.0% of Viewray shares are owned by institutional investors. 17.8% of Pacific Biosciences of California shares are owned by insiders. Comparatively, 62.8% of Viewray shares are owned 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Pacific Biosciences of California and Viewray, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Biosciences of California 0 2 1 0 2.33
Viewray 0 0 5 0 3.00

Pacific Biosciences of California presently has a consensus target price of $6.27, suggesting a potential upside of 148.68%. Viewray has a consensus target price of $11.20, suggesting a potential upside of 10.67%. Given Pacific Biosciences of California’s higher probable upside, analysts plainly believe Pacific Biosciences of California is more favorable than Viewray.

Profitability

This table compares Pacific Biosciences of California and Viewray’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Biosciences of California -95.97% -97.50% -59.40%
Viewray -193.53% N/A -59.34%

Volatility and Risk

Pacific Biosciences of California has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, Viewray has a beta of 17.6, suggesting that its share price is 1,660% more volatile than the S&P 500.

Summary

Viewray beats Pacific Biosciences of California on 8 of the 14 factors compared between the two stocks.

Pacific Biosciences of California Company Profile

Pacific Biosciences of California, Inc. designs, develops and manufactures sequencing systems to help scientists resolve genetically complex problems. The Company is engaged in the development, manufacturing and marketing of an integrated platform for genetic analysis. Its Single Molecule, Real-Time (SMRT) technology enables single molecule, real-time detection of biological processes. It offers The SMRT Cell, Phospholinked nucleotides and The PacBio RS II and Sequel instruments. Its SMRT technology enables the observation of deoxyribonucleic acid (DNA) synthesis as it occurs in real-time by harnessing the natural process of DNA replication, which is actuated by the DNA polymerase. Its phospholinked nucleotides have a fluorescent dye attached to the phosphate chain of the nucleotide rather than to the base. The PacBio RS II and Sequel instruments include optics, automated liquid handling, a touchscreen control interface and computational hardware and software.

Viewray Company Profile

ViewRay, Inc. designs, manufactures and markets MRIdian, the magnetic resonance imaging (MRI)-guided radiation therapy system to image and treat cancer patients simultaneously. The Company offers radiation therapy technology combined with magnetic resonance imaging. MRIdian integrates MRI technology, radiation delivery and the Company’s software to locate, target and track the position and shape of soft-tissue tumors while radiation is delivered. MRIdian delivers radiation to the tumor accurately while delivering less radiation to healthy tissue. MRIdian provides real-time imaging that defines the targeted tumor from the surrounding soft tissue and other critical organs during radiation treatment. MRIdian allows physicians to record the level of radiation exposure that the tumor has received and adapt the prescription between fractions as needed.

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