Critical Analysis: Cresco Labs (OTCMKTS:CRLBF) vs. Spectral AI (NASDAQ:MDAI)

Spectral AI (NASDAQ:MDAI) and Cresco Labs (OTCMKTS:CRLBF) are both small-cap healthcare companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

67.1% of Spectral AI shares are held by institutional investors. Comparatively, 0.1% of Cresco Labs shares are held by institutional investors. 13.7% of Spectral AI shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Spectral AI and Cresco Labs, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectral AI	1	0	1	1	2.67
Cresco Labs	0	1	1	1	3.00

Spectral AI presently has a consensus target price of $4.00, indicating a potential upside of 181.69%. Given Spectral AI’s higher probable upside, equities analysts plainly believe Spectral AI is more favorable than Cresco Labs.

Volatility and Risk

Spectral AI has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Cresco Labs has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Valuation and Earnings

This table compares Spectral AI and Cresco Labs”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectral AI	$15.39 million	2.97	-$7.57 million	($0.35)	-4.06
Cresco Labs	$655.85 million	0.30	-$135.41 million	($0.28)	-1.90

Spectral AI has higher earnings, but lower revenue than Cresco Labs. Spectral AI is trading at a lower price-to-earnings ratio than Cresco Labs, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Spectral AI and Cresco Labs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectral AI	-69.27%	N/A	-78.56%
Cresco Labs	-14.61%	-6.36%	-1.31%

Summary

Cresco Labs beats Spectral AI on 7 of the 13 factors compared between the two stocks.

About Spectral AI

Spectral AI, Inc. is a medical diagnostic technology company focused on using artificial intelligence and advanced imaging to support earlier, more objective assessment of wound healing. The company develops predictive diagnostic systems intended to help clinicians evaluate wounds and make treatment decisions. Its principal product is the DeepView System, a noninvasive imaging and artificial intelligence platform designed to assess burn wounds and predict the likelihood that injured tissue will heal without surgical intervention.

About Cresco Labs

Cresco Labs Inc. is a Chicago-based cannabis company that cultivates, manufactures and distributes cannabis products in the United States. Founded in 2013, the company operates as a multistate cannabis operator, serving regulated markets through a combination of wholesale operations and retail dispensaries. The company’s product portfolio includes flower, pre-rolls, vape products, concentrates, edibles and other cannabis-related goods. Its principal brands have included Cresco, High Supply, Good News, Wonder Wellness, FloraCal Farms and Mindy’s Edibles.