AxoGen (NASDAQ:AXGN) and IRIDEX (NASDAQ:IRIX) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Profitability

This table compares AxoGen and IRIDEX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AxoGen -24.96% -26.50% -17.39%
IRIDEX -36.98% -51.61% -38.41%

Analyst Ratings

This is a summary of current ratings and recommmendations for AxoGen and IRIDEX, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AxoGen 0 0 7 0 3.00
IRIDEX 0 0 1 0 3.00

AxoGen currently has a consensus price target of $44.67, indicating a potential upside of 31.45%. IRIDEX has a consensus price target of $10.00, indicating a potential upside of 100.00%. Given IRIDEX’s higher possible upside, analysts plainly believe IRIDEX is more favorable than AxoGen.

Volatility & Risk

AxoGen has a beta of -0.39, suggesting that its stock price is 139% less volatile than the S&P 500. Comparatively, IRIDEX has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500.

Valuation and Earnings

This table compares AxoGen and IRIDEX’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AxoGen $60.43 million 21.55 -$10.44 million ($0.31) -109.61
IRIDEX $41.59 million 1.40 -$12.86 million ($1.11) -4.50

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

Institutional and Insider Ownership

82.8% of AxoGen shares are held by institutional investors. Comparatively, 47.5% of IRIDEX shares are held by institutional investors. 7.9% of AxoGen shares are held by insiders. Comparatively, 4.8% of IRIDEX shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

AxoGen beats IRIDEX on 10 of the 13 factors compared between the two stocks.

AxoGen Company Profile

AxoGen, Inc. develops and markets surgical solutions for peripheral nerve injuries. The company's surgical solutions include Avance Nerve Graft, an off-the-shelf processed human nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site; AxoGuard Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves; and AxoGuard Nerve Protector, a porcine submucosa ECM product that is used to wrap and protect damaged peripheral nerves, as well as reinforces the nerve reconstruction while preventing soft tissue attachments. Its solutions also comprise Avive Soft Tissue Membrane, a minimally processed human umbilical cord membrane that can be used as a resorbable soft tissue covering to separate tissues and modulate inflammation in the surgical bed. In addition, the company offers AcroVal neurosensory and motor testing system, which consists of AcroGrip for use in hand grip strength measurement; AcroPinch for measuring pinch strength; and Pressure-Specified Sensory Device, a somatosensory evaluation and measurement device. Further, it provides AxoTouch two point discriminator, a tool that is used for measuring the innervation density of surface area of the skin. The company provides its products to hospitals, surgery centers, and military hospitals in the United States, Canada, the United Kingdom and other European countries, and internationally. AxoGen, Inc. is headquartered in Alachua, Florida.

IRIDEX Company Profile

IRIDEX Corporation, an ophthalmic medical technology company, provides therapeutic based laser systems, delivery devices, and consumable instrumentation to treat sight-threatening eye diseases in ophthalmology. The company offers laser consoles, such as Cyclo G6 laser system for use in the treatment of glaucoma; IQ 532 and IQ 577 laser systems, which are used for the treatment of diabetic macular edema and other retinal diseases; and OcuLight TX, OcuLight SL, OcuLight SLx, OcuLight GL, and OcuLight GLx laser systems, which are used to treat proliferative diabetic retinopathy, macular holes, retinal tears, and detachments. It also provides delivery devices, including TxCell scanning laser delivery system that allows the physician to perform multi-spot pattern scanning; and slit lamp adapter, which allows the physician to utilize a standard slit lamp in diagnosis and treatment procedures. In addition, the company offers MicroPulse P3 Probe, which is used with its Cylco G6 laser system that delivers laser to treat glaucoma; G-Probe, which is used in procedures to treat uncontrolled glaucoma; G-Probe Illuminate and G-Probe Illuminate, which are used in procedures to treat refractory glaucoma; and EndoProbe family of products used in vitrectomy procedures. It serves ophthalmologists, research and teaching hospitals, government installations, surgical centers, hospitals, and office clinics. IRIDEX Corporation markets its products through direct and independent sales force in the United States, as well as through independent distributors internationally. The company was formerly known as IRIS Medical Instruments, Inc. and changed its name to IRIDEX Corporation in November 1995. IRIDEX Corporation was founded in 1989 and is headquartered in Mountain View, California.

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