Novadaq Technologies (NASDAQ: NVDQ) and EndoChoice Holdings (NYSE:GI) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.

Risk and Volatility

Novadaq Technologies has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, EndoChoice Holdings has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Insider and Institutional Ownership

88.8% of Novadaq Technologies shares are held by institutional investors. Comparatively, 37.3% of EndoChoice Holdings shares are held by institutional investors. 31.5% of EndoChoice Holdings shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Novadaq Technologies and EndoChoice Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novadaq Technologies 0 11 2 0 2.15
EndoChoice Holdings 0 1 0 0 2.00

Novadaq Technologies presently has a consensus target price of $11.86, indicating a potential upside of 1.87%. Given Novadaq Technologies’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Novadaq Technologies is more favorable than EndoChoice Holdings.

Valuation and Earnings

This table compares Novadaq Technologies and EndoChoice Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novadaq Technologies $83.42 million 8.07 -$47.39 million ($1.04) -11.19
EndoChoice Holdings N/A N/A N/A ($2.67) -3.00

EndoChoice Holdings has higher revenue, but lower earnings than Novadaq Technologies. Novadaq Technologies is trading at a lower price-to-earnings ratio than EndoChoice Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Novadaq Technologies and EndoChoice Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novadaq Technologies -71.97% -49.93% -41.47%
EndoChoice Holdings -90.67% -130.29% -60.59%

Summary

Novadaq Technologies beats EndoChoice Holdings on 9 of the 11 factors compared between the two stocks.

Novadaq Technologies Company Profile

NOVADAQ Technologies Inc. is a medical device company. The Company primarily develops, manufactures and markets real-time fluorescence imaging products that are designed for use by surgeons in the operating room and other clinical settings where open and minimally invasive surgery or interventional procedures are performed. The Company’s SPY fluorescence imaging technology platform (SPY Fluorescence Imaging) provides clinically relevant anatomic and physiologic images of blood flow in vessels and micro-vessels during a range of surgical and outpatient procedures performed in the operating room or clinic. The SPY Fluorescence Imaging platform can be used to develop imaging devices specifically designed to meet the needs of different surgeons and other healthcare providers and the specialty procedures they perform. SPY images enable physicians treating life-threatening illnesses, such as breast, head and neck, colon, complex hernias, diabetes and certain cardiovascular diseases.

EndoChoice Holdings Company Profile

EndoChoice Holdings, Inc. is a medical device company. The Company is focused on designing and commercializing a platform of products and services for gastrointestinal (GI) caregivers. The Company offers a range of products and services that span single-use devices and infection control products, pathology and imaging systems. The Company’s products are used in colonoscopy and procedures of the upper GI tract, including esophagogastroduodenoscopy (EGD). The Company’s imaging products include Fuse system, EndoCart, and Endoscope repair and maintenance. The Company’s single-use therapeutic devices include Neptune injection needle, Boa polypectomy snare, Rescue retrieval devices, Blox bite block, TrapEase polyp traps, Hydra irrigation system, EndoGlide+, Compliance EndoKit, SafeStart, EndoKit, CinchPad and GI pathology. The Company serves over 2,500 GI departments that perform endoscopic procedures.

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