Financial Analysis: Trimedyne (TMED) versus NxStage Medical (NXTM)

Trimedyne (NASDAQ: NXTM) and NxStage Medical (NASDAQ:NXTM) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Trimedyne and NxStage Medical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trimedyne N/A N/A N/A
NxStage Medical -3.67% -6.85% -4.50%

Analyst Ratings

This is a summary of current recommendations for Trimedyne and NxStage Medical, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trimedyne 0 0 0 0 N/A
NxStage Medical 0 2 0 0 2.00

NxStage Medical has a consensus target price of $30.00, indicating a potential upside of 5.89%. Given NxStage Medical’s higher possible upside, analysts plainly believe NxStage Medical is more favorable than Trimedyne.

Institutional & Insider Ownership

83.2% of NxStage Medical shares are owned by institutional investors. 11.1% of Trimedyne shares are owned by company insiders. Comparatively, 4.9% of NxStage Medical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Trimedyne and NxStage Medical’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Trimedyne $4.70 million 0.20 -$40,000.00 N/A N/A
NxStage Medical $393.94 million 4.72 -$14.47 million ($0.22) -128.77

Trimedyne has higher earnings, but lower revenue than NxStage Medical.

Volatility and Risk

Trimedyne has a beta of -1.1, indicating that its stock price is 210% less volatile than the S&P 500. Comparatively, NxStage Medical has a beta of 0.02, indicating that its stock price is 98% less volatile than the S&P 500.

Trimedyne Company Profile

Trimedyne, Inc. manufactures and sells lasers, and disposable and reusable fiber-optic laser devices for use in the medical field. It offers lasers, fibers, needles, and switch tips for use in orthopedics, urology, ear and nose surgery, throat surgery, gynecology, gastrointestinal surgery, general surgery, and other medical specialties. The company also provides 80 watt and 30 watt holmium lasers, and side firing laser needles to treat herniated or ruptured spinal discs. In addition, it engages in the provision of services, and rental of lasers and other medical equipment to hospitals and surgery centers on a fee-per-case basis. The company operates in Asia, Europe, Latin America, the Middle East, Australia, and internationally. It markets its products through commission sales representatives in the United States and independent distributors internationally. Trimedyne, Inc. was founded in 1980 and is based in Irvine, California.

NxStage Medical Company Profile

NxStage Medical, Inc., a medical technology company, develops, manufactures, and markets products and services for patients suffering from chronic or acute kidney failure. Its primary product includes the System One, a portable hemodialysis system, which is used primarily for home hemodialysis and a range of dialysis therapies to deliver in the home setting. The company operates through three segments: System One, In-Center, and Services. The System One segment sells and rents the NxStage System One and PureFlow SL dialysate preparation equipment, as well as sells disposable products in the home and critical care market for the treatment of end-stage renal disease (ESRD) patients in the home or a home-like setting and in the critical care market for the treatment of hospital-based patients with acute kidney failure or fluid overload. The In-Center segment sells blood tubing sets and needles for hemodialysis primarily for the treatment of ESRD patients at dialysis centers, and needles for apheresis. The Services segment offers dialysis services to patients at NxStage Kidney Care dialysis centers. As of February 3, 2018, it had 21 centers. NxStage Medical, Inc. markets its products through direct sales to dialysis clinics and hospitals in the United States, the United Kingdom, and Canada, as well as through distributors in Europe and internationally. The company was formerly known as QB Medical, Inc. and changed its name to NxStage Medical, Inc. NxStage Medical, Inc. was founded in 1998 and is headquartered in Lawrence, Massachusetts.

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