Reviewing InMode (NASDAQ:INMD) and West Pharmaceutical Services (NYSE:WST)

West Pharmaceutical Services (NYSE:WST) and InMode (NASDAQ:INMD) are both healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Volatility & Risk

West Pharmaceutical Services has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, InMode has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500.

Profitability

This table compares West Pharmaceutical Services and InMode’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Pharmaceutical Services	18.81%	21.78%	15.99%
InMode	20.69%	11.99%	10.60%

Analyst Recommendations

This is a summary of current ratings and recommmendations for West Pharmaceutical Services and InMode, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Pharmaceutical Services	0	1	13	0	2.93
InMode	1	3	1	0	2.00

West Pharmaceutical Services currently has a consensus target price of $424.67, indicating a potential upside of 2.75%. InMode has a consensus target price of $16.00, indicating a potential upside of 18.51%. Given InMode’s higher possible upside, analysts clearly believe InMode is more favorable than West Pharmaceutical Services.

Earnings & Valuation

This table compares West Pharmaceutical Services and InMode”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Pharmaceutical Services	$3.40 billion	8.48	$493.70 million	$8.91	46.39
InMode	$374.62 million	2.07	$93.83 million	$1.23	10.98

West Pharmaceutical Services has higher revenue and earnings than InMode. InMode is trading at a lower price-to-earnings ratio than West Pharmaceutical Services, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.9% of West Pharmaceutical Services shares are owned by institutional investors. Comparatively, 68.0% of InMode shares are owned by institutional investors. 0.6% of West Pharmaceutical Services shares are owned by insiders. Comparatively, 6.9% of InMode shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

West Pharmaceutical Services beats InMode on 10 of the 14 factors compared between the two stocks.

About West Pharmaceutical Services

West Pharmaceutical Services, Inc. designs, manufactures, and sells containment and delivery systems for injectable drugs and healthcare products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Proprietary Products and Contract-Manufactured Products. The Proprietary Products segment offers stoppers and seals for injectable packaging systems; syringe and cartridge components, including custom solutions for the needs of injectable drug applications, as well as administration systems that enhance the safe delivery of drugs through advanced reconstitution, mixing, and transfer technologies; and films, coatings, washing, and vision inspection and sterilization processes and services to enhance the quality of packaging components. This segment also provides drug containment solutions, including Crystal Zenith, a cyclic olefin polymer in the form of vials, syringes, and cartridges; and self-injection devices; and a range of integrated solutions, including analytical lab services, pre-approval primary packaging support and engineering development, regulatory expertise, and after-sales technical support. This segment serves biologic, generic, and pharmaceutical drug companies. The Contract-Manufactured Products segment is involved in the design, manufacture, and automated assembly of devices used in surgical, diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products. The company serves pharmaceutical, diagnostic, and medical device companies. It sells and distributes its products through its sales force and distribution network, contract sales agents, and regional distributors. West Pharmaceutical Services, Inc. was founded in 1923 and is headquartered in Exton, Pennsylvania.

About InMode

InMode Ltd. designs, develops, manufactures, and markets minimally invasive aesthetic medical products based on its proprietary radiofrequency assisted lipolysis and deep subdermal fractional radiofrequency technologies in the United States and internationally. The company offers minimally invasive aesthetic medical products for various procedures, such as liposuction with simultaneous skin tightening, body and face contouring, and ablative skin rejuvenation treatments, as well as for use in women's health conditions and procedures. It also designs, develops, manufactures, and markets non-invasive medical aesthetic products that target an array of procedures, including permanent hair reduction, facial skin rejuvenation, wrinkle reduction, cellulite treatment, skin appearance and texture, and superficial benign vascular and pigmented lesions, as well as hands-free medical aesthetic products that target a range of procedures, such as skin tightening, fat reduction, and muscle stimulation. The company was formerly known as Invasix Ltd. and changed its name to InMode Ltd. in November 2017. InMode Ltd. was incorporated in 2008 and is headquartered in Yokneam, Israel.