Tandem Diabetes Care (NASDAQ:TNDM – Get Free Report) and IRIDEX (NASDAQ:IRIX – Get Free Report) are both small-cap healthcare companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.
Insider and Institutional Ownership
20.1% of IRIDEX shares are owned by institutional investors. 2.1% of Tandem Diabetes Care shares are owned by insiders. Comparatively, 8.6% of IRIDEX shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility & Risk
Tandem Diabetes Care has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, IRIDEX has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Tandem Diabetes Care | $1.01 billion | 1.04 | -$204.71 million | ($0.93) | -16.37 |
| IRIDEX | $51.57 million | 0.21 | -$4.44 million | ($0.20) | -3.15 |
IRIDEX has lower revenue, but higher earnings than Tandem Diabetes Care. Tandem Diabetes Care is trading at a lower price-to-earnings ratio than IRIDEX, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Tandem Diabetes Care and IRIDEX, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tandem Diabetes Care | 1 | 11 | 10 | 1 | 2.48 |
| IRIDEX | 1 | 0 | 1 | 0 | 2.00 |
Tandem Diabetes Care currently has a consensus price target of $29.18, suggesting a potential upside of 91.75%. IRIDEX has a consensus price target of $3.00, suggesting a potential upside of 376.19%. Given IRIDEX’s higher possible upside, analysts plainly believe IRIDEX is more favorable than Tandem Diabetes Care.
Profitability
This table compares Tandem Diabetes Care and IRIDEX’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tandem Diabetes Care | -6.08% | -45.97% | -6.23% |
| IRIDEX | -6.88% | N/A | -12.55% |
Summary
Tandem Diabetes Care beats IRIDEX on 8 of the 15 factors compared between the two stocks.
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.
About IRIDEX
IRIDEX Corporation, an ophthalmic medical technology company, provides therapeutic based laser systems, delivery devices, and consumable instrumentation to treat sight-threatening eye diseases in ophthalmology. It offers laser consoles, such as Cyclo G6 laser system for use in the treatment of glaucoma; IQ 532 and IQ 577 laser systems, which are used for the treatment of retinal disorders; and OcuLight TX, OcuLight SL, OcuLight SLx, OcuLight GL, and OcuLight GLx laser photocoagulation systems that are used to treat proliferative diabetic retinopathy, macular holes, retinal tears, and detachments. The company also provides delivery devices, including TxCell scanning laser delivery system that allows the physician to perform multi-spot pattern scanning; slit lamp adapter, which allows the physician to utilize a standard slit lamp in diagnosis and treatment procedures; and laser indirect ophthalmoscope for use in procedures to treat peripheral retinal disorders. It offers MicroPulse P3 Probe, which is used with its Cylco G6 laser system to perform MicroPulse transscleral laser therapy; G-Probe, which is used in procedures to treat uncontrolled glaucoma; G-Probe and G-Probe Illuminate, which are used in procedures to treat refractory glaucoma; and EndoProbe family of products for use in vitrectomy procedures. The company serves ophthalmologists, research and teaching hospitals, government installations, surgical centers, hospitals, veterinary practices, and office clinics. It markets its products through direct and independent sales force in the United States, as well as through independent distributors internationally. The company was formerly known as IRIS Medical Instruments, Inc. and changed its name to IRIDEX Corporation in November 1995. IRIDEX Corporation was incorporated in 1989 and is headquartered in Mountain View, California.
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