Head to Head Review: NeuroPace (NASDAQ:NPCE) and Tandem Diabetes Care (NASDAQ:TNDM)

Tandem Diabetes Care (NASDAQ:TNDM) and NeuroPace (NASDAQ:NPCE) are both small-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Earnings & Valuation

This table compares Tandem Diabetes Care and NeuroPace”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tandem Diabetes Care	$1.01 billion	1.23	-$204.71 million	($0.93)	-19.34
NeuroPace	$99.99 million	4.36	-$21.47 million	($0.57)	-22.26

NeuroPace has lower revenue, but higher earnings than Tandem Diabetes Care. NeuroPace is trading at a lower price-to-earnings ratio than Tandem Diabetes Care, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Tandem Diabetes Care and NeuroPace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tandem Diabetes Care	-6.08%	-45.97%	-6.23%
NeuroPace	-19.34%	-105.64%	-16.51%

Risk and Volatility

Tandem Diabetes Care has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, NeuroPace has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.

Institutional & Insider Ownership

78.8% of NeuroPace shares are owned by institutional investors. 2.1% of Tandem Diabetes Care shares are owned by insiders. Comparatively, 19.2% of NeuroPace shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Tandem Diabetes Care and NeuroPace, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandem Diabetes Care	1	12	9	1	2.43
NeuroPace	1	1	6	1	2.78

Tandem Diabetes Care presently has a consensus price target of $27.08, suggesting a potential upside of 50.52%. NeuroPace has a consensus price target of $20.50, suggesting a potential upside of 61.54%. Given NeuroPace’s stronger consensus rating and higher possible upside, analysts clearly believe NeuroPace is more favorable than Tandem Diabetes Care.

Summary

NeuroPace beats Tandem Diabetes Care on 8 of the 14 factors compared between the two stocks.

About Tandem Diabetes Care

Tandem Diabetes Care, Inc., a medical device company, designs, develops, and commercializes technology solutions for people living with diabetes in the United States and internationally. The company's flagship product is the t:slim X2 insulin delivery system, a pump platform for managing insulin delivery and display continuous glucose monitoring sensor information directly on the pump home screen; and Tandem Mobi insulin pump, an automated insulin delivery system. It also sells single-use products, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to the user's body. In addition, the company offers Tandem Device Updater used to update the pump software from a personal computer; Tandem Source, a web-based data management platform, which provides a visual way to display diabetes therapy management data from the pumps, integrated CGMs, and supported blood glucose meters; and Sugarmate, a mobile app used to help people visualize diabetes therapy data. The company was formerly known as Phluid Inc. and changed its name to Tandem Diabetes Care, Inc. in January 2008. Tandem Diabetes Care, Inc. was incorporated in 2006 and is headquartered in San Diego, California.

About NeuroPace

NeuroPace, Inc. operates as a medical device company in the United States. The company develops RNS system, a brain-responsive neuromodulation system that delivers personalized, real-time treatment at the seizure source for treating medically refractory focal epilepsy. It also records continuous brain activity data and enables clinicians to monitor patients in person and remotely. Its RNS System includes RNS neurostimulator, cortical strip and depth leads, and Patient Remote Monitor, as well as other implantable and non-implantable accessories. The company sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures. NeuroPace, Inc. was incorporated in 1997 and is headquartered in Mountain View, California.