OrthoPediatrics (NASDAQ:KIDS) & Pulmonx (NASDAQ:LUNG) Financial Analysis

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

Insider and Institutional Ownership

69.1% of OrthoPediatrics shares are held by institutional investors. Comparatively, 91.0% of Pulmonx shares are held by institutional investors. 32.5% of OrthoPediatrics shares are held by insiders. Comparatively, 7.5% of Pulmonx shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares OrthoPediatrics and Pulmonx”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OrthoPediatrics	$252.72 million	2.31	-$39.65 million	($1.68)	-13.31
Pulmonx	$90.50 million	0.94	-$54.00 million	($1.16)	-1.70

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

Analyst Recommendations

This is a breakdown of current recommendations for OrthoPediatrics and Pulmonx, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OrthoPediatrics	1	1	9	0	2.73
Pulmonx	1	0	3	0	2.50

OrthoPediatrics currently has a consensus price target of $26.44, suggesting a potential upside of 18.27%. Pulmonx has a consensus price target of $7.67, suggesting a potential upside of 288.19%. Given Pulmonx’s higher possible upside, analysts clearly believe Pulmonx is more favorable than OrthoPediatrics.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OrthoPediatrics	-15.72%	-8.10%	-5.54%
Pulmonx	-55.03%	-96.66%	-38.32%

Risk and Volatility

OrthoPediatrics has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Pulmonx has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500.

Summary

OrthoPediatrics beats Pulmonx on 10 of the 14 factors compared between the two stocks.

About OrthoPediatrics

OrthoPediatrics Corp., a medical device company, engages in designing, developing, and marketing anatomically appropriate implants, instruments, and specialized braces for children with orthopedic conditions in the United States and internationally. The company offers pediatric trauma and deformity correction products; scoliosis procedures for the treatment of spinal deformity; and sports medicine and other products. Its products comprise PediLoc, PediPlates, cannulated screws, PediFlex nail, PediNail, PediLoc Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE Spine, BandLoc, Pediguard, Pediatric Nailing Platform | Femur, Devise Rail, Orthex, The Fassier-Duval Telescopic Intramedullary System, SLIMTM Nail, The GAP Nail, The Free Gliding SCFE Screw System, GIROTM Growth Modulation System, PNP Tibia System, ApiFix Mid-C System, and Mitchell Ponseti. The company serves pediatric orthopedic market, as well as pediatric orthopedic surgeons and caregivers. OrthoPediatrics Corp. was founded in 2006 and is headquartered in Warsaw, Indiana.

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.