TearLab Corporation (OTCMKTS: TEAR) and LightPath Technologies (NASDAQ:LPTH) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for TearLab Corporation and LightPath Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TearLab Corporation 0 0 4 0 3.00
LightPath Technologies 0 0 2 0 3.00

TearLab Corporation presently has a consensus target price of $5.75, indicating a potential upside of 698.61%. LightPath Technologies has a consensus target price of $2.80, indicating a potential upside of 12.45%. Given TearLab Corporation’s higher possible upside, analysts plainly believe TearLab Corporation is more favorable than LightPath Technologies.

Profitability

This table compares TearLab Corporation and LightPath Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TearLab Corporation -60.22% N/A -75.54%
LightPath Technologies 25.13% 31.44% 19.09%

Institutional & Insider Ownership

19.8% of TearLab Corporation shares are owned by institutional investors. Comparatively, 32.7% of LightPath Technologies shares are owned by institutional investors. 12.0% of TearLab Corporation shares are owned by insiders. Comparatively, 12.7% of LightPath Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares TearLab Corporation and LightPath Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
TearLab Corporation $28.01 million 0.15 -$19.92 million ($2.98) -0.24
LightPath Technologies $28.37 million 2.15 $7.70 million $0.31 8.03

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

Volatility & Risk

TearLab Corporation has a beta of 2.92, suggesting that its share price is 192% more volatile than the S&P 500. Comparatively, LightPath Technologies has a beta of -0.49, suggesting that its share price is 149% less volatile than the S&P 500.

Summary

LightPath Technologies beats TearLab Corporation on 9 of the 12 factors compared between the two stocks.

TearLab Corporation Company Profile

TearLab Corporation is an in-vitro diagnostic company. The Company has commercialized a tear testing platform, the TearLab Osmolarity System, which enables eye care practitioners to test for sensitive and specific biomarkers using nanoliters of tear film at the point-of-care. The Company, through its subsidiary TearLab Research, Inc., develops technologies to enable eye care practitioners to test a range of biomarkers (chemistries, metabolites, genes and proteins) at the point-of-care. Its product, the TearLab Osmolarity System, enables the measurement of tear osmolarity in the doctor’s office. The TearLab Osmolarity System consists of approximately three components: the TearLab disposable, the TearLab Pen, and the TearLab Reader. The TearLab disposable is a single-use microfluidic microchip. The TearLab Pen is a hand-held device that interfaces with the TearLab disposable. The TearLab Reader is a small desktop unit that allows for the docking of the TearLab Pen.

LightPath Technologies Company Profile

LightPath Technologies, Inc. is a manufacturer and integrator of families of precision molded aspheric optics, fiber-optic collimator, GRADIUM glass lenses and other optical materials used to produce products that manipulate light. The Company designs, develops, manufactures and distributes optical components and assemblies utilizing the optical processes and manufacturing technologies. The Company also performs research and development for optical solutions for the traditional optics markets and communications markets. The Company’s products are incorporated into a range of applications by its customers in various industries, including defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors.

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