Aradigm (NASDAQ:ARDM) and Viveve Medical (NASDAQ:VIVE) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, risk and analyst recommendations.

Profitability

This table compares Aradigm and Viveve Medical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aradigm -244.15% N/A -240.23%
Viveve Medical -239.33% -551.85% -100.83%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Aradigm and Viveve Medical, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aradigm 0 1 0 0 2.00
Viveve Medical 0 1 6 0 2.86

Viveve Medical has a consensus target price of $9.20, indicating a potential upside of 156.27%. Given Viveve Medical’s stronger consensus rating and higher probable upside, analysts plainly believe Viveve Medical is more favorable than Aradigm.

Institutional & Insider Ownership

30.0% of Aradigm shares are owned by institutional investors. Comparatively, 62.0% of Viveve Medical shares are owned by institutional investors. 4.5% of Aradigm shares are owned by company insiders. Comparatively, 23.3% of Viveve Medical shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Aradigm and Viveve Medical’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aradigm $14.47 million 1.27 -$10.70 million ($0.72) -1.68
Viveve Medical $15.29 million 7.39 -$36.95 million ($2.11) -1.70

Aradigm has higher earnings, but lower revenue than Viveve Medical. Viveve Medical is trading at a lower price-to-earnings ratio than Aradigm, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Aradigm has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Viveve Medical has a beta of -0.21, suggesting that its stock price is 121% less volatile than the S&P 500.

Summary

Viveve Medical beats Aradigm on 10 of the 14 factors compared between the two stocks.

Aradigm Company Profile

Aradigm Corporation, a specialty pharmaceutical company, focuses on the development and commercialization of products for the treatment and prevention of severe respiratory diseases. Its lead development candidates are proprietary formulations of the potent antibiotic ciprofloxacin, including Linhaliq and Lipoquin that are delivered by inhalation for the management of infections associated with severe respiratory diseases, including non-cystic fibrosis bronchiectasis, cystic fibrosis, and non-tuberculosis mycobacterium. The company is also developing inhaled ciprofloxacin formulations for treatment of patients with cystic fibrosis, and has tested for the prevention and treatment of inhaled bioterrorism infections, such as Coxiella burnetii or Q fever, inhalation anthrax, tularemia, melioidosis and pneumonic plague. Aradigm Corporation has collaboration agreements with Grifols, S.A. The company was founded in 1991 and is headquartered in Hayward, California.

Viveve Medical Company Profile

Viveve Medical, Inc. designs, develops, manufactures, and markets medical devices for the non-invasive treatment of various post-partum conditions. The company offers Viveve System, a radio frequency generator, a reusable hand piece, and single-use treatment tip, as well as other consumable accessories. It markets its products through sales employees and distributors in the United States, the Asia Pacific, Europe, the Middle East, Latin America, and Canada. Viveve Medical, Inc. was founded in 2005 and is headquartered in Englewood, Colorado.

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