STAAR Surgical (NASDAQ:STAA) vs. InMode (NASDAQ:INMD) Critical Review

STAAR Surgical (NASDAQ:STAA) and InMode (NASDAQ:INMD) are both small-cap healthcare companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Risk and Volatility

STAAR Surgical has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, InMode has a beta of 1.86, suggesting that its stock price is 86% more volatile than the S&P 500.

Insider & Institutional Ownership

96.7% of STAAR Surgical shares are owned by institutional investors. Comparatively, 68.0% of InMode shares are owned by institutional investors. 39.9% of STAAR Surgical shares are owned by insiders. Comparatively, 6.9% of InMode shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for STAAR Surgical and InMode, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STAAR Surgical	3	8	2	0	1.92
InMode	1	6	1	0	2.00

STAAR Surgical currently has a consensus target price of $28.40, suggesting a potential upside of 17.55%. InMode has a consensus target price of $16.00, suggesting a potential upside of 8.04%. Given STAAR Surgical’s higher probable upside, equities analysts plainly believe STAAR Surgical is more favorable than InMode.

Profitability

This table compares STAAR Surgical and InMode’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STAAR Surgical	1.13%	9.05%	6.99%
InMode	20.69%	11.99%	10.60%

Earnings and Valuation

This table compares STAAR Surgical and InMode”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STAAR Surgical	$239.44 million	5.06	-$80.45 million	$0.07	345.14
InMode	$370.49 million	2.30	$93.83 million	$1.23	12.04

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

Summary

InMode beats STAAR Surgical on 8 of the 14 factors compared between the two stocks.

About STAAR Surgical

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and companion delivery systems to deliver the lenses into the eye. The company provides implantable Collamer lens product family (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia. It markets its products to health care providers, including ophthalmic surgeons, vision and surgical centers, hospitals, government facilities, and distributors, as well as products are primarily used by ophthalmologists. The company sells its products directly through its sales representatives in the United States, Japan, Germany, Spain, Canada, the United Kingdom, and Singapore, as well as through own representatives and independent distributors in China, Korea, India, France, Benelux, Italy, and internationally. STAAR Surgical Company was incorporated in 1982 and is headquartered in Lake Forest, California.

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.