Avita Medical (NASDAQ:RCEL – Get Free Report) and Pulmonx (NASDAQ:LUNG – Get Free Report) are both small-cap healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.
Analyst Ratings
This is a breakdown of current ratings for Avita Medical and Pulmonx, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Avita Medical | 1 | 1 | 5 | 0 | 2.57 |
| Pulmonx | 1 | 0 | 3 | 0 | 2.50 |
Avita Medical currently has a consensus price target of $15.00, indicating a potential downside of 15.01%. Pulmonx has a consensus price target of $7.67, indicating a potential upside of 173.81%. Given Pulmonx’s higher probable upside, analysts clearly believe Pulmonx is more favorable than Avita Medical.
Institutional & Insider Ownership
27.7% of Avita Medical shares are owned by institutional investors. Comparatively, 91.0% of Pulmonx shares are owned by institutional investors. 2.2% of Avita Medical shares are owned by insiders. Comparatively, 7.5% of Pulmonx shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Avita Medical has a beta of 2.03, meaning that its stock price is 103% more volatile than the S&P 500. Comparatively, Pulmonx has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.
Earnings and Valuation
This table compares Avita Medical and Pulmonx”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Avita Medical | $71.61 million | 7.74 | -$48.59 million | ($1.18) | -14.96 |
| Pulmonx | $90.50 million | 1.35 | -$54.00 million | ($1.01) | -2.77 |
Avita Medical has higher earnings, but lower revenue than Pulmonx. Avita Medical is trading at a lower price-to-earnings ratio than Pulmonx, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Avita Medical and Pulmonx’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Avita Medical | -42.65% | N/A | -71.34% |
| Pulmonx | -47.93% | -98.23% | -35.89% |
About Avita Medical
Avita Medical, Inc. (NASDAQ: RCEL) is a regenerative medicine company focused on developing and commercializing therapies that use a patient’s own cells to help restore damaged skin and tissue. Its lead product is the RECELL System, an autologous cell-harvesting device designed to prepare a suspension of a patient’s skin cells at the point of care for application to wounds. RECELL is used in the treatment of certain thermal burn wounds and other skin injuries. The system is intended to support wound healing and may reduce the amount of donor skin required for grafting by enabling clinicians to create a cell suspension from a small sample of the patient’s healthy skin.
About Pulmonx
Pulmonx Corporation is a medical device company focused on developing minimally invasive treatments for patients with severe emphysema, a form of chronic obstructive pulmonary disease (COPD). The company’s technologies are designed to reduce hyperinflation in damaged portions of the lung and help improve breathing, exercise capacity and quality of life. Pulmonx’s primary product is the Zephyr Endobronchial Valve, a bronchoscopically implanted, one-way valve intended for certain patients with severe emphysema.
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