Financial Analysis: iRhythm Technologies (IRTC) vs. Its Rivals

iRhythm Technologies (NASDAQ:IRTC) is one of 511 publicly-traded companies in the “Healthcare Equipment & Supplies” industry, but how does it weigh in compared to its peers? We will compare iRhythm Technologies to related businesses based on the strength of its valuation, profitability, dividends, institutional ownership, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

40.5% of shares of all “Healthcare Equipment & Supplies” companies are owned by institutional investors. 1.0% of iRhythm Technologies shares are owned by company insiders. Comparatively, 14.8% of shares of all “Healthcare Equipment & Supplies” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for iRhythm Technologies and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
iRhythm Technologies	1	2	12	2	2.88
iRhythm Technologies Competitors	4270	10532	18289	828	2.46

iRhythm Technologies currently has a consensus target price of $172.86, suggesting a potential upside of 31.92%. As a group, “Healthcare Equipment & Supplies” companies have a potential upside of 19.40%. Given iRhythm Technologies’ stronger consensus rating and higher probable upside, research analysts clearly believe iRhythm Technologies is more favorable than its peers.

Profitability

This table compares iRhythm Technologies and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
iRhythm Technologies	-1.69%	10.11%	1.53%
iRhythm Technologies Competitors	-276.78%	-149.08%	-21.73%

Volatility and Risk

iRhythm Technologies has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, iRhythm Technologies’ peers have a beta of 2.57, meaning that their average stock price is 157% more volatile than the S&P 500.

Earnings and Valuation

This table compares iRhythm Technologies and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
iRhythm Technologies	$747.14 million	-$44.55 million	-304.72
iRhythm Technologies Competitors	$1.90 billion	$137.77 million	9.37

iRhythm Technologies’ peers have higher revenue and earnings than iRhythm Technologies. iRhythm Technologies is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

iRhythm Technologies beats its peers on 7 of the 13 factors compared.

About iRhythm Technologies

iRhythm Technologies, Inc., a digital healthcare company, engages in the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services to diagnose arrhythmias in the United States. It offers Zio services, an ambulatory monitoring solution, including long-term and short-term continuous monitoring and mobile cardiac telemetry monitoring services. The company also provides the Zio Monitor System, a prescription-only, remote electrocardiogram (ECG) monitoring system that consists of a patch ECG monitor that records the electric signal from the heart continuously for up to 14 days and the Zio ECG Utilization Software System, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS System; the Zio XT System is the previous generation of the Zio Monitor System and is a prescription-only, remote ECG monitoring system that consists of the Zio XT patch that records the electric signal from the heart continuously for up to 14 days; and the Zio AT system, a prescription-only, remote ECG monitoring system that similarly consists of the Zio AT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the Zio AT patch and the ZEUS System during the patient wear period. It has a development collaboration agreement with Verily Life Sciences LLC and Verity Ireland Limited to develop various next-generation atrial fibrillation screening, detection, or monitoring products. The company was incorporated in 2006 and is headquartered in San Francisco, California.