Analyzing Varex Imaging (NASDAQ:VREX) & PROCEPT BioRobotics (NASDAQ:PRCT)

PROCEPT BioRobotics (NASDAQ:PRCT) and Varex Imaging (NASDAQ:VREX) are both small-cap healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Earnings and Valuation

This table compares PROCEPT BioRobotics and Varex Imaging”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PROCEPT BioRobotics	$308.05 million	3.20	-$95.57 million	($1.94)	-8.87
Varex Imaging	$844.60 million	0.92	-$70.30 million	$0.52	35.48

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

Risk and Volatility

PROCEPT BioRobotics has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Varex Imaging has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Profitability

This table compares PROCEPT BioRobotics and Varex Imaging’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PROCEPT BioRobotics	-32.53%	-30.62%	-22.10%
Varex Imaging	2.55%	9.19%	4.13%

Institutional and Insider Ownership

89.5% of PROCEPT BioRobotics shares are owned by institutional investors. 4.0% of PROCEPT BioRobotics shares are owned by insiders. Comparatively, 4.6% of Varex Imaging shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for PROCEPT BioRobotics and Varex Imaging, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PROCEPT BioRobotics	2	9	3	1	2.20
Varex Imaging	0	7	0	0	2.00

PROCEPT BioRobotics currently has a consensus price target of $25.09, indicating a potential upside of 45.88%. Varex Imaging has a consensus price target of $16.88, indicating a potential downside of 8.54%. Given PROCEPT BioRobotics’ stronger consensus rating and higher possible upside, equities research analysts plainly believe PROCEPT BioRobotics is more favorable than Varex Imaging.

Summary

Varex Imaging beats PROCEPT BioRobotics on 9 of the 15 factors compared between the two stocks.

About PROCEPT BioRobotics

PROCEPT BioRobotics Corporation, a surgical robotics company, focuses on developing transformative solutions in urology in the United States and internationally. The company develops, manufactures, and sells AquaBeam Robotic System, an image-guided, surgical robotic system for use in minimally invasive urologic surgery with a focus on treating benign prostatic hyperplasia (BPH). It also designs Aquablation therapy for males suffering from lower urinary tract symptoms due to BPH. PROCEPT BioRobotics Corporation was incorporated in 2007 and is headquartered in San Jose, California.

About Varex Imaging

Varex Imaging Corporation designs, manufactures, and sells X-ray imaging components. The company operates through two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components, comprising X-ray tubes, digital detectors and accessories, ionization chambers, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and heat exchangers. This segment's products are used in a range of applications, including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses. The Industrial segment designs, develops, manufactures, sells, and services Linatron X-ray linear accelerators, X-ray tubes, digital detectors, high voltage connectors, and coolers for use in security and inspection applications, such as baggage screening at airports, cargo screening at ports and borders, and nondestructive testing, irradiation, and inspection in various applications. The company sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. It has operations in North America, South America, Europe, Russia, the Middle East, India, Africa, Asia, and Australia. Varex Imaging Corporation was incorporated in 2016 and is headquartered in Salt Lake City, Utah.