Financial Review: Tactile Systems Technology (NASDAQ:TCMD) versus Treace Medical Concepts (NASDAQ:TMCI)

Treace Medical Concepts (NASDAQ:TMCI) and Tactile Systems Technology (NASDAQ:TCMD) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Risk and Volatility

Treace Medical Concepts has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Tactile Systems Technology has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Treace Medical Concepts and Tactile Systems Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Treace Medical Concepts	2	4	1	0	1.86
Tactile Systems Technology	0	2	4	1	2.86

Treace Medical Concepts currently has a consensus price target of $4.77, indicating a potential upside of 11.45%. Tactile Systems Technology has a consensus price target of $38.60, indicating a potential upside of 28.75%. Given Tactile Systems Technology’s stronger consensus rating and higher possible upside, analysts plainly believe Tactile Systems Technology is more favorable than Treace Medical Concepts.

Earnings & Valuation

This table compares Treace Medical Concepts and Tactile Systems Technology”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Treace Medical Concepts	$212.69 million	1.31	-$59.00 million	($0.97)	-4.41
Tactile Systems Technology	$329.52 million	2.05	$19.09 million	$0.88	34.07

Tactile Systems Technology has higher revenue and earnings than Treace Medical Concepts. Treace Medical Concepts is trading at a lower price-to-earnings ratio than Tactile Systems Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Treace Medical Concepts and Tactile Systems Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Treace Medical Concepts	-29.44%	-67.04%	-30.28%
Tactile Systems Technology	5.91%	9.70%	7.53%

Insider and Institutional Ownership

84.1% of Treace Medical Concepts shares are held by institutional investors. Comparatively, 83.4% of Tactile Systems Technology shares are held by institutional investors. 23.4% of Treace Medical Concepts shares are held by company insiders. Comparatively, 2.1% of Tactile Systems Technology shares are held by company 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.

Summary

Tactile Systems Technology beats Treace Medical Concepts on 12 of the 15 factors compared between the two stocks.

About Treace Medical Concepts

Treace Medical Concepts, Inc., a medical technology company, designs, manufactures, and markets medical devices in the United States. The company offers Lapiplasty 3D bunion correction system that combines instruments, implants, and surgical methods designed to surgically correct three planes of the bunion deformity. It also provides Lapiplasty mini-incision system designed to allow the Lapiplasty procedure to be performed through a 3.5cm incision. In addition, the company offers Adductoplasty system designed for reproducible realignment, stabilization, and fusion of the midfoot. Treace Medical Concepts, Inc. was founded in 2013 and is headquartered in Ponte Vedra, Florida.

About Tactile Systems Technology

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices to treat underserved chronic diseases in the United States. It offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema in the home setting; and Entre Plus System, a portable pneumatic compression device for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers. The company also provides Kylee, a mobile application to help patients learn about lymphedema, track their symptoms, and treatment, as well as to share their progress with their doctor; and AffloVest, a portable high frequency chest wall oscillation vest to treat patients with retained pulmonary secretions resulting from bronchiectasis, cystic fibrosis, and various neuromuscular disorders. Tactile Systems Technology, Inc. was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.