Nephros (NASDAQ:NEPH – Get Free Report) and Tandem Diabetes Care (NASDAQ:TNDM – Get Free Report) are both small-cap healthcare companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.
Valuation & Earnings
This table compares Nephros and Tandem Diabetes Care”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nephros | $18.79 million | 1.89 | $1.19 million | $0.16 | 20.44 |
| Tandem Diabetes Care | $1.01 billion | 1.36 | -$204.71 million | ($0.93) | -21.28 |
Nephros has higher earnings, but lower revenue than Tandem Diabetes Care. Tandem Diabetes Care is trading at a lower price-to-earnings ratio than Nephros, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Nephros and Tandem Diabetes Care’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nephros | 8.38% | 10.60% | 8.05% |
| Tandem Diabetes Care | -6.08% | -45.97% | -6.23% |
Insider and Institutional Ownership
41.1% of Nephros shares are held by institutional investors. 8.3% of Nephros shares are held by company insiders. Comparatively, 2.1% of Tandem Diabetes Care shares are held 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.
Risk & Volatility
Nephros has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500. Comparatively, Tandem Diabetes Care has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent recommendations and price targets for Nephros and Tandem Diabetes Care, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nephros | 0 | 3 | 1 | 0 | 2.25 |
| Tandem Diabetes Care | 1 | 12 | 9 | 1 | 2.43 |
Nephros presently has a consensus target price of $4.00, indicating a potential upside of 22.32%. Tandem Diabetes Care has a consensus target price of $27.08, indicating a potential upside of 36.83%. Given Tandem Diabetes Care’s stronger consensus rating and higher possible upside, analysts clearly believe Tandem Diabetes Care is more favorable than Nephros.
Summary
Nephros beats Tandem Diabetes Care on 8 of the 14 factors compared between the two stocks.
About Nephros
Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also manufactures and sells water filters that enhance the taste and odor of water, as well as reduce biofilm, cysts, particulates, and scale build-up in downstream equipment. It markets its products to food service, hospitality, convenience store, and health care markets, as well as medical institutions. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.
About Tandem Diabetes Care
Tandem Diabetes Care, Inc., a medical device company, designs, develops, and commercializes technology solutions for people living with diabetes in the United States and internationally. The company's flagship product is the t:slim X2 insulin delivery system, a pump platform for managing insulin delivery and display continuous glucose monitoring sensor information directly on the pump home screen; and Tandem Mobi insulin pump, an automated insulin delivery system. It also sells single-use products, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to the user's body. In addition, the company offers Tandem Device Updater used to update the pump software from a personal computer; Tandem Source, a web-based data management platform, which provides a visual way to display diabetes therapy management data from the pumps, integrated CGMs, and supported blood glucose meters; and Sugarmate, a mobile app used to help people visualize diabetes therapy data. The company was formerly known as Phluid Inc. and changed its name to Tandem Diabetes Care, Inc. in January 2008. Tandem Diabetes Care, Inc. was incorporated in 2006 and is headquartered in San Diego, California.
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