Reviewing Varex Imaging (NASDAQ:VREX) and TerrAscend (OTCMKTS:TSNDF)

TerrAscend (OTCMKTS:TSNDF) and Varex Imaging (NASDAQ:VREX) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Valuation & Earnings

This table compares TerrAscend and Varex Imaging”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TerrAscend	$260.56 million	0.50	-$81.33 million	($0.09)	-4.73
Varex Imaging	$844.60 million	0.92	-$70.30 million	$0.52	35.13

Varex Imaging has higher revenue and earnings than TerrAscend. TerrAscend is trading at a lower price-to-earnings ratio than Varex Imaging, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TerrAscend and Varex Imaging’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TerrAscend	-28.96%	-30.76%	-4.89%
Varex Imaging	2.55%	9.19%	4.13%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for TerrAscend and Varex Imaging, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TerrAscend	0	1	0	0	2.00
Varex Imaging	0	7	0	0	2.00

Varex Imaging has a consensus price target of $16.88, indicating a potential downside of 7.64%. Given Varex Imaging’s higher probable upside, analysts plainly believe Varex Imaging is more favorable than TerrAscend.

Volatility & Risk

TerrAscend has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Varex Imaging has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Insider and Institutional Ownership

5.8% of TerrAscend shares are owned by institutional investors. 31.9% of TerrAscend shares are owned by insiders. Comparatively, 4.6% of Varex Imaging shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Varex Imaging beats TerrAscend on 9 of the 12 factors compared between the two stocks.

About TerrAscend

TerrAscend is a cannabis company that cultivates, processes and sells cannabis products through retail and wholesale channels. Its offerings include cannabis flower, pre-rolls, concentrates, edibles and other consumer products, sold under a portfolio of company and partner brands. The company operates in several U.S. markets, including Pennsylvania, New Jersey, Maryland, Michigan and California. Its retail business includes dispensaries operating under names such as The Apothecarium and Gage, alongside cultivation and processing facilities that supply its stores and other retailers.

About Varex Imaging

Varex Imaging Corporation designs and manufactures components used in X-ray imaging systems. Its products include X-ray tubes, digital detectors, image-processing solutions and related software and services for medical and industrial applications. In healthcare, Varex’s components are used in systems for applications such as radiography, computed tomography, mammography and oncology. Its industrial products support inspection and analysis in areas including security screening and nondestructive testing.