Analyzing Pacific Biosciences of California (PACB) & Viewray (VRAY)

Pacific Biosciences of California (NASDAQ: PACB) and Viewray (NASDAQ:VRAY) are both small-cap healthcare companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Profitability

This table compares Pacific Biosciences of California and Viewray’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Biosciences of California -95.97% -97.50% -59.40%
Viewray -193.53% N/A -59.34%

Insider and Institutional Ownership

70.5% of Pacific Biosciences of California shares are owned by institutional investors. Comparatively, 50.0% of Viewray shares are owned by institutional investors. 17.8% of Pacific Biosciences of California shares are owned by company insiders. Comparatively, 62.8% of Viewray shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Pacific Biosciences of California has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Viewray has a beta of 17.6, indicating that its share price is 1,660% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Pacific Biosciences of California and Viewray, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Biosciences of California 0 2 1 0 2.33
Viewray 0 0 5 0 3.00

Pacific Biosciences of California presently has a consensus target price of $6.27, suggesting a potential upside of 130.39%. Viewray has a consensus target price of $11.20, suggesting a potential upside of 24.58%. Given Pacific Biosciences of California’s higher probable upside, equities research analysts clearly believe Pacific Biosciences of California is more favorable than Viewray.

Earnings & Valuation

This table compares Pacific Biosciences of California and Viewray’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Biosciences of California $90.71 million 3.49 -$74.37 million ($0.91) -2.99
Viewray $22.24 million 27.30 -$50.63 million ($1.09) -8.25

Viewray has lower revenue, but higher earnings than Pacific Biosciences of California. Viewray is trading at a lower price-to-earnings ratio than Pacific Biosciences of California, indicating that it is currently the more affordable of the two stocks.

Summary

Viewray beats Pacific Biosciences of California on 8 of the 14 factors compared between the two stocks.

About Pacific Biosciences of California

Pacific Biosciences of California, Inc. designs, develops and manufactures sequencing systems to help scientists resolve genetically complex problems. The Company is engaged in the development, manufacturing and marketing of an integrated platform for genetic analysis. Its Single Molecule, Real-Time (SMRT) technology enables single molecule, real-time detection of biological processes. It offers The SMRT Cell, Phospholinked nucleotides and The PacBio RS II and Sequel instruments. Its SMRT technology enables the observation of deoxyribonucleic acid (DNA) synthesis as it occurs in real-time by harnessing the natural process of DNA replication, which is actuated by the DNA polymerase. Its phospholinked nucleotides have a fluorescent dye attached to the phosphate chain of the nucleotide rather than to the base. The PacBio RS II and Sequel instruments include optics, automated liquid handling, a touchscreen control interface and computational hardware and software.

About Viewray

ViewRay, Inc. designs, manufactures and markets MRIdian, the magnetic resonance imaging (MRI)-guided radiation therapy system to image and treat cancer patients simultaneously. The Company offers radiation therapy technology combined with magnetic resonance imaging. MRIdian integrates MRI technology, radiation delivery and the Company’s software to locate, target and track the position and shape of soft-tissue tumors while radiation is delivered. MRIdian delivers radiation to the tumor accurately while delivering less radiation to healthy tissue. MRIdian provides real-time imaging that defines the targeted tumor from the surrounding soft tissue and other critical organs during radiation treatment. MRIdian allows physicians to record the level of radiation exposure that the tumor has received and adapt the prescription between fractions as needed.

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