Critical Comparison: Hologic (HOLX) versus Check Cap (CHEK)

Hologic (NASDAQ: HOLX) and Check Cap (NASDAQ:CHEK) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Valuation & Earnings

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This table compares Hologic and Check Cap’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hologic $3.06 billion 3.29 $755.50 million $2.03 17.95
Check Cap N/A N/A -$8.82 million ($6.42) -0.56

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

Profitability

This table compares Hologic and Check Cap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hologic 34.53% 20.07% 7.11%
Check Cap N/A -129.20% -100.81%

Insider and Institutional Ownership

97.6% of Hologic shares are owned by institutional investors. Comparatively, 22.2% of Check Cap shares are owned by institutional investors. 0.8% of Hologic shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Hologic and Check Cap, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hologic 0 4 9 0 2.69
Check Cap 0 0 2 0 3.00

Hologic presently has a consensus target price of $47.54, suggesting a potential upside of 30.49%. Check Cap has a consensus target price of $5.50, suggesting a potential upside of 53.20%. Given Check Cap’s stronger consensus rating and higher probable upside, analysts clearly believe Check Cap is more favorable than Hologic.

Volatility & Risk

Hologic has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Check Cap has a beta of 0.06, meaning that its share price is 94% less volatile than the S&P 500.

Summary

Hologic beats Check Cap on 11 of the 13 factors compared between the two stocks.

Hologic Company Profile

Hologic, Inc. is a developer, manufacturer and supplier of diagnostics products, medical imaging systems and surgical products with an emphasis on women’s health. The Company operates through four segments: Diagnostics, Breast Health, GYN Surgical and Skeletal Health. The diagnostics products include Aptima family of assays, ThinPrep system, the Rapid Fetal Fibronectin Test and Procleix blood screening assays. It offers viral load assays for the quantitation of Hepatitis B Virus (HBV), Hepatitis C Virus (HCV) and Human Immunodeficiency Virus-1 (HIV-1). The Breast Health products include breast imaging and related products and accessories, including digital mammography systems, computer-aided detection (CAD) and breast biopsy guidance systems. The GYN Surgical products include NovaSure Endometrial Ablation System and MyoSure Hysteroscopic Tissue Removal System. The Skeletal Health segment offers Discovery and Horizon X-ray bone densitometers and mini C-arm imaging systems.

Check Cap Company Profile

Check-Cap Ltd. (Check-Cap) is a clinical-stage medical diagnostics company. The Company is engaged in the development of an ingestible imaging capsule that utilizes low-dose X-rays for the detection and imaging of colonic polyps and colorectal cancers, or CRC. The Company’s system consists of main components, such as ingestible scanning capsule; Capsule Positioning System (CPS), a recorder worn on the patient’s back, and a personal computer (PC)-based work station for data reconstruction and image processing. The Company’s scanning capsule will be swallowed and propelled by natural motility through the gastrointestinal tract and excreted naturally with no need for retrieval for data collection. Its scanning capsule employs low-dose X-rays, which allow the system to image the interior lining of the colon even when surrounded by intestinal content. Its capsule transmits information to a receiving device worn on the patient’s body that stores the information for off-line analysis.

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