Nephros (NASDAQ:NEPH) vs. Tandem Diabetes Care (NASDAQ:TNDM) Head-To-Head Analysis

Tandem Diabetes Care (NASDAQ:TNDM) and Nephros (NASDAQ:NEPH) are both small-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Tandem Diabetes Care and Nephros, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandem Diabetes Care	1	12	9	1	2.43
Nephros	0	3	1	0	2.25

Tandem Diabetes Care currently has a consensus price target of $27.08, indicating a potential upside of 41.70%. Nephros has a consensus price target of $4.00, indicating a potential upside of 26.18%. Given Tandem Diabetes Care’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Tandem Diabetes Care is more favorable than Nephros.

Earnings & Valuation

This table compares Tandem Diabetes Care and Nephros”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tandem Diabetes Care	$1.01 billion	1.31	-$204.71 million	($0.93)	-20.55
Nephros	$18.79 million	1.83	$1.19 million	$0.16	19.81

Nephros has lower revenue, but higher earnings 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 Tandem Diabetes Care and Nephros’ 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%
Nephros	8.38%	10.60%	8.05%

Volatility and Risk

Tandem Diabetes Care has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500. Comparatively, Nephros has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Insider and Institutional Ownership

41.1% of Nephros shares are held by institutional investors. 2.1% of Tandem Diabetes Care shares are held by insiders. Comparatively, 8.3% of Nephros shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Nephros beats Tandem Diabetes Care on 9 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 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.