Reviewing Pro-Dex (NASDAQ:PDEX) and AtriCure (NASDAQ:ATRC)

AtriCure (NASDAQ:ATRC) and Pro-Dex (NASDAQ:PDEX) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares AtriCure and Pro-Dex’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AtriCure $201.63 million 5.08 -$21.14 million ($0.94) -28.11
Pro-Dex $22.47 million 2.58 $1.62 million N/A N/A

Pro-Dex has lower revenue, but higher earnings than AtriCure.

Institutional & Insider Ownership

91.7% of AtriCure shares are owned by institutional investors. Comparatively, 15.9% of Pro-Dex shares are owned by institutional investors. 8.0% of AtriCure shares are owned by insiders. Comparatively, 41.7% of Pro-Dex shares are owned 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for AtriCure and Pro-Dex, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AtriCure 0 1 5 0 2.83
Pro-Dex 0 0 1 0 3.00

AtriCure presently has a consensus price target of $36.83, indicating a potential upside of 39.41%. Pro-Dex has a consensus price target of $20.00, indicating a potential upside of 41.94%. Given Pro-Dex’s stronger consensus rating and higher possible upside, analysts plainly believe Pro-Dex is more favorable than AtriCure.

Volatility & Risk

AtriCure has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Pro-Dex has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500.

Profitability

This table compares AtriCure and Pro-Dex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AtriCure -9.46% -13.06% -8.91%
Pro-Dex 12.98% 19.69% 14.47%

Summary

Pro-Dex beats AtriCure on 9 of the 13 factors compared between the two stocks.

About AtriCure

AtriCure, Inc. develops, manufactures, and sells devices for the surgical ablation of cardiac tissue and systems to medical centers in the United States and internationally. The company offers Isolator Synergy and Isolator Synergy Access clamps for the treatment of persistent and long-standing persistent atrial fibrillation concomitant to other open-heart surgical procedures; EPi-Sense guided coagulation system used for the coagulation of tissue; and COBRA Fusion surgical ablation system to combine bipolar temperature-controlled radio frequency energy control with monopolar energy. It also provides multifunctional pens that allow surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation and ablate cardiac tissue with the same device; and linear ablation devices, which enable users to make longer linear lines of ablation. In addition, the company offers cryoICE cryoablation system used to ablate cardiac tissue for the treatment of cardiac arrhythmias; AtriClip system used to occlude the left atrial appendage by mechanically clamping the appendage; and CryoICE CRYO2 cryoablation system to apply cryo-energy to targeted intercostal peripheral nerves in the ribcage and temporarily relieve pain. Further, it provides Lumitip dissector to separate tissues to provide access to key anatomical structures that are targeted for ablation; Fusion Magnetic Retriever System that allows access around anatomical structures; and cardiac surgery instruments, which are used during surgical procedures for repair or replacement of certain heart valves. The company sells its products through independent distributors and direct sales personnel. The company was founded in 2000 and is headquartered in Mason, Ohio.

About Pro-Dex

Pro-Dex, Inc., together with its subsidiaries, designs, develops, and manufactures powered surgical instruments, dental instruments, and rotary air motors worldwide. It also manufactures plastic injection molds for various industries; and shavers and machined parts. In addition, it provides engineering, and quality and regulatory consulting services. The company offers its products under the name of Pro-Dex.Pro-Dex, Inc. sells its medical device products primarily to original equipment manufacturers; and dental products to dental product distributors. Its products are used in hospitals, medical engineering labs, scientific research facilities, and high-tech manufacturing operations. Pro-Dex, Inc. was founded in 1978 and is headquartered in Irvine, California.

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