Amedica (NASDAQ: AMDA) and Obalon Therapeutics (NASDAQ:OBLN) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.

Profitability

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This table compares Amedica and Obalon Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amedica -71.07% -73.86% -36.96%
Obalon Therapeutics -350.67% -74.80% -56.13%

Valuation & Earnings

This table compares Amedica and Obalon Therapeutics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amedica $15.23 million 0.39 -$14.76 million ($1.93) -0.99
Obalon Therapeutics $9.91 million 7.11 -$34.76 million ($2.08) -1.92

Amedica has higher revenue and earnings than Obalon Therapeutics. Obalon Therapeutics is trading at a lower price-to-earnings ratio than Amedica, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Amedica and Obalon Therapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amedica 0 2 0 0 2.00
Obalon Therapeutics 0 1 3 0 2.75

Amedica currently has a consensus price target of $60.00, suggesting a potential upside of 3,025.00%. Obalon Therapeutics has a consensus price target of $7.00, suggesting a potential upside of 75.00%. Given Amedica’s higher probable upside, equities analysts plainly believe Amedica is more favorable than Obalon Therapeutics.

Insider & Institutional Ownership

5.6% of Amedica shares are held by institutional investors. Comparatively, 42.7% of Obalon Therapeutics shares are held by institutional investors. 0.1% of Amedica shares are held by insiders. Comparatively, 16.4% of Obalon Therapeutics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Amedica beats Obalon Therapeutics on 8 of the 13 factors compared between the two stocks.

Amedica Company Profile

Amedica Corporation is a commercial biomaterial company. The Company is a vertically integrated silicon nitride orthopedic medical device manufacturer. It is focused on using its silicon nitride ceramic technology platform to develop, manufacture and sell a range of medical devices. It is also engaged in developing wear- and corrosion-resistant implant components for hip and knee arthroplasty. The Company markets its Valeo family of silicon nitride interbody spinal fusion devices in the United States, Europe and Brazil for use in the cervical and thoracolumbar areas of the spine. In addition to its silicon nitride-based spinal fusion products, it markets a line of non-silicon nitride spinal surgery products, which allows the Company to provide surgeons and hospitals with a solution for spinal procedures. Its Valeo interbody spinal fusion devices include Anterior Lumbar, Posterior Lumbar, Oblique Lumbar, Transforaminal Lumbar, Lateral Lumbar, Cervical and Corpectomy.

Obalon Therapeutics Company Profile

Obalon Therapeutics, Inc. is a United States-based commercial-stage medical device company focused on developing and commercializing medical devices to treat obese and overweight people by facilitating weight loss. The Company’s product, Obalon balloon system, is a swallowable, gas-filled intragastric balloon designed to provide weight loss in obese patients. The Obalon balloon system is intended to be used as an adjunct to a moderate intensity diet and behavior modification program. All balloons must be removed six months after the first balloon is placed. The Obalon balloon system intends to provide patients and physicians with a reversible and repeatable weight loss solution in an outpatient setting, without altering patient anatomy or requiring surgery. The Company has received Premarket approval (PMA) for its Obalon balloon system based on the results of its United States pivotal clinical trial, referred to as the SMART trial.

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