Contrasting Avita Medical (NASDAQ:RCEL) and Koninklijke Philips (NYSE:PHG)

Koninklijke Philips (NYSE:PHG) and Avita Medical (NASDAQ:RCEL) are both healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares Koninklijke Philips and Avita Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Koninklijke Philips	6.30%	14.38%	5.96%
Avita Medical	-56.96%	N/A	-78.53%

Analyst Ratings

This is a summary of current recommendations and price targets for Koninklijke Philips and Avita Medical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koninklijke Philips	0	5	0	0	2.00
Avita Medical	1	1	5	0	2.57

Avita Medical has a consensus target price of $11.40, indicating a potential upside of 15.38%. Given Avita Medical’s stronger consensus rating and higher possible upside, analysts clearly believe Avita Medical is more favorable than Koninklijke Philips.

Insider and Institutional Ownership

13.7% of Koninklijke Philips shares are held by institutional investors. Comparatively, 27.7% of Avita Medical shares are held by institutional investors. 2.2% of Avita Medical shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Koninklijke Philips has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Avita Medical has a beta of 2.02, indicating that its stock price is 102% more volatile than the S&P 500.

Earnings & Valuation

This table compares Koninklijke Philips and Avita Medical”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koninklijke Philips	$17.66 billion	1.37	$1.01 billion	$1.36	18.10
Avita Medical	$71.61 million	4.25	-$48.59 million	($1.44)	-6.86

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

About Koninklijke Philips

Koninklijke Philips N.V. operates as a health technology company in North America, the Greater China, and internationally. The company operates through Diagnosis & Treatment Businesses, Connected Care Businesses, and Personal Health Businesses segments. It also provides diagnostic imaging solutions, includes magnetic resonance imaging, X-ray systems, and computed tomography (CT) systems and software comprising detector-based spectral CT solutions, as well as molecular and hybrid imaging solutions for nuclear medicine; echography solutions focused on diagnosis, treatment planning and guidance for cardiology, general imaging, obstetrics/gynecology, and point-of-care applications; integrated interventional systems, and interventional diagnostic and therapeutic devices to treat coronary artery and peripheral vascular disease. In addition, the company offers acute patient management solutions; emergency care solutions; sleep and respiratory care solutions; and electronic medical record and care management solutions. Further, it provides power toothbrushes, brush heads, and interdental cleaning and teeth whitening products; infant feeding, baby monitors, and digital parental solutions; and grooming and beauty products and solutions. The company has strategic partnership agreements with TriHealth, Northwell, and Atrium Health. The company was formerly known as Koninklijke Philips Electronics N.V. and changed its name to Koninklijke Philips N.V. in May 2013. Koninklijke Philips N.V. was founded in 1891 and is headquartered in Amsterdam, the Netherlands.

About Avita Medical

AVITA Medical, Inc., together with its subsidiaries, operates as a regenerative medicine company in the United States and internationally. The company's lead product is the RECELL System, a cell harvesting device used for the treatment of thermal burn wounds, full-thickness skin defects, and repigmentation of stable depigmented vitiligo lesions. It develops RECELL GO to control the manual process of disaggregation, filtration, and soak time. The company was formerly known as AVITA Therapeutics, Inc. AVITA Medical, Inc. was incorporated in 2020 and is headquartered in Valencia, California.