TerrAscend (OTCMKTS:TSNDF – Get Free Report) and Owlet (NYSE:OWLT – Get Free Report) are both small-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.
Profitability
This table compares TerrAscend and Owlet’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| TerrAscend | -31.01% | -32.93% | -5.49% |
| Owlet | -8.61% | -601.24% | -15.96% |
Valuation & Earnings
This table compares TerrAscend and Owlet”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 | 0.58 | -$81.33 million | ($0.11) | -4.43 |
| Owlet | $105.70 million | 1.16 | -$39.68 million | ($0.75) | -5.61 |
Owlet has lower revenue, but higher earnings than TerrAscend. Owlet is trading at a lower price-to-earnings ratio than TerrAscend, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
5.8% of TerrAscend shares are held by institutional investors. Comparatively, 72.6% of Owlet shares are held by institutional investors. 31.9% of TerrAscend shares are held by company insiders. Comparatively, 36.2% of Owlet shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Risk & Volatility
TerrAscend has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Owlet has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings for TerrAscend and Owlet, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| TerrAscend | 0 | 1 | 0 | 0 | 2.00 |
| Owlet | 1 | 1 | 3 | 0 | 2.40 |
Owlet has a consensus price target of $15.00, indicating a potential upside of 256.72%. Given Owlet’s stronger consensus rating and higher possible upside, analysts clearly believe Owlet is more favorable than TerrAscend.
Summary
Owlet beats TerrAscend on 9 of the 14 factors compared between the two stocks.
About TerrAscend
TerrAscend Corp. cultivates, processes, and sells medical and adult use cannabis in Canada and the United States. The company produces and distributes hemp-derived wellness products to retail locations; and manufactures vaporizables, concentrates, topicals, tinctures and edibles. It also operates retail dispensaries under the Apothecarium and State Flower brand names. The company was incorporated in 2017 and is headquartered in Mississauga, Canada.
About Owlet
Owlet, Inc. provides digital parenting solutions in the United States and internationally. The company's platform focuses on giving real-time data and insights to parents. It offers Dream Sock, a wearable infant health monitor equipped with pulse oximetry technology to track vitals signs, such as pulse rate, oxygen, activity, and sleep patterns; BabySat which is intended for infants with heightened health risk; Owlet Cam, a monitoring device in smartphones that offers video and audio, predictive sleep insights, and cry detections; and accessories, including Owlet Sleeper, as well as Duo and Dream Duo that combines Smart Sock with the Owlet Cam. The company was founded in 2012 and is headquartered in Lehi, Utah.
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