Financial Analysis: DarioHealth (NASDAQ:DRIO) vs. Health Catalyst (NASDAQ:HCAT)

Health Catalyst (NASDAQ:HCAT) and DarioHealth (NASDAQ:DRIO) are both small-cap healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Health Catalyst and DarioHealth, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Health Catalyst	1	7	3	0	2.18
DarioHealth	1	1	2	0	2.25

Health Catalyst currently has a consensus target price of $2.45, indicating a potential upside of 40.80%. DarioHealth has a consensus target price of $10.00, indicating a potential upside of 50.83%. Given DarioHealth’s stronger consensus rating and higher probable upside, analysts plainly believe DarioHealth is more favorable than Health Catalyst.

Profitability

This table compares Health Catalyst and DarioHealth’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Health Catalyst	-90.61%	-1.83%	-0.80%
DarioHealth	-169.87%	-54.81%	-33.36%

Institutional & Insider Ownership

85.0% of Health Catalyst shares are held by institutional investors. Comparatively, 33.4% of DarioHealth shares are held by institutional investors. 19.4% of Health Catalyst shares are held by company insiders. Comparatively, 3.5% of DarioHealth shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Health Catalyst has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, DarioHealth has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Earnings & Valuation

This table compares Health Catalyst and DarioHealth”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Health Catalyst	$311.14 million	0.42	-$177.97 million	($3.68)	-0.47
DarioHealth	$22.36 million	2.91	-$41.71 million	($6.13)	-1.08

DarioHealth has lower revenue, but higher earnings than Health Catalyst. DarioHealth is trading at a lower price-to-earnings ratio than Health Catalyst, indicating that it is currently the more affordable of the two stocks.

Summary

Health Catalyst beats DarioHealth on 10 of the 14 factors compared between the two stocks.

About Health Catalyst

Health Catalyst, Inc. provides data and analytics technology and services to healthcare organizations in the United States. It operates in two segments, Technology and Professional Services. The company provides data operating system data platform which provides clients single comprehensive environment to integrate and organize data from their disparate software systems; and analytics applications, a software analytics applications build for data platform to analyze clients face across clinical and quality, population health, and financial and operational use cases. It offers services expertise solutions comprising data and analytics, domain expertise and education, tech-enabled managed, and implementation services; and opportunity analysis and prioritization, data governance, data modeling and analysis, quality and process improvement strategy, cost accounting, data abstraction, and population health strategies. The company was formerly known as HQC Holdings, Inc. and changed its name to Health Catalyst, Inc. in March 2017. Health Catalyst, Inc. was founded in 2008 and is headquartered in South Jordan, Utah.

About DarioHealth

DarioHealth Corp. operates as a digital health company in the United States, Canada, the European Union, Australia, and New Zealand. Its digital therapeutics platform and suite of solutions deliver personalized and dynamic interventions driven by data analytics and one-on-one coaching for diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health. The company offers Dario Evolve, a metabolic solution to address metabolic health needs, such as diabetes, pre-diabetes, hypertension, and weight management; Dario Move, which address most common musculoskeletal conditions; Dario Elevate, a behavioral health solution that optimizes access to evidence-based care; and Dario One, a full suite of chronic condition management solution; and Dario blood glucose monitoring systems. It also provides native devices, such as glucose meter, blood pressure cuff, digital scale, and biofeedback sensor device, as well as live coaching services. The company was formerly known as LabStyle Innovations Corp. and changed its name to DarioHealth Corp. in July 2016. DarioHealth Corp. was incorporated in 2011 and is based in New York, New York.