Head to Head Contrast: Pulmonx (NASDAQ:LUNG) and Precision Optics (NASDAQ:POCI)

Precision Optics (NASDAQ:POCI) and Pulmonx (NASDAQ:LUNG) are both small-cap healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.

Insider & Institutional Ownership

13.7% of Precision Optics shares are held by institutional investors. Comparatively, 91.0% of Pulmonx shares are held by institutional investors. 14.4% of Precision Optics shares are held by company insiders. Comparatively, 7.5% of Pulmonx shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Precision Optics has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Pulmonx has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Precision Optics and Pulmonx, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Precision Optics	1	0	0	0	1.00
Pulmonx	1	0	3	0	2.50

Pulmonx has a consensus target price of $7.67, suggesting a potential upside of 318.94%. Given Pulmonx’s stronger consensus rating and higher possible upside, analysts plainly believe Pulmonx is more favorable than Precision Optics.

Profitability

This table compares Precision Optics and Pulmonx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Precision Optics	-11.51%	-23.92%	-13.05%
Pulmonx	-55.03%	-96.66%	-38.32%

Earnings and Valuation

This table compares Precision Optics and Pulmonx”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Precision Optics	$31.53 million	1.55	-$5.78 million	($0.46)	-9.70
Pulmonx	$87.44 million	0.90	-$54.00 million	($1.16)	-1.58

Precision Optics has higher earnings, but lower revenue than Pulmonx. Precision Optics is trading at a lower price-to-earnings ratio than Pulmonx, indicating that it is currently the more affordable of the two stocks.

Summary

Precision Optics beats Pulmonx on 8 of the 14 factors compared between the two stocks.

About Precision Optics

Precision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. It offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians. The company also provides components and assemblies for industrial and military use. It markets its products to medical device companies. The company was incorporated in 1982 and is based in Gardner, Massachusetts.

About Pulmonx

Pulmonx Corporation, a commercial-stage medical technology company, provides minimally invasive devices for the treatment of chronic obstructive pulmonary diseases. The company offers Zephyr Endobronchial Valve, a solution for the treatment of patients with hyperinflation associated with severe emphysema; and Chartis Pulmonary Assessment System, a balloon catheter and console system with flow and pressure sensors that are used to assess the presence of collateral ventilation. It also offers StratX Lung Analysis Platform, a cloud-based quantitative computed tomography analysis service that offers information on emphysema destruction, fissure completeness, and lobar volume to help identify target lobes for the treatment with Zephyr Valves. The company serves emphysema patients in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company was formerly known as Pulmonx and changed its name to Pulmonx Corporation in December 2013. Pulmonx Corporation was incorporated in 1995 and is headquartered in Redwood City, California.