Cyberonics (NASDAQ: CYBX) and Obalon Therapeutics (NASDAQ:OBLN) are both medical devices & implants companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares Cyberonics and Obalon Therapeutics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cyberonics N/A N/A N/A $2.14 N/A
Obalon Therapeutics $3.39 million 37.61 -$20.46 million ($1.93) -3.79

Cyberonics has higher earnings, but lower revenue than Obalon Therapeutics. Obalon Therapeutics is trading at a lower price-to-earnings ratio than Cyberonics, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Cyberonics and Obalon Therapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cyberonics 0 0 0 0 N/A
Obalon Therapeutics 1 0 2 0 2.33

Obalon Therapeutics has a consensus target price of $12.00, indicating a potential upside of 64.16%.

Institutional & Insider Ownership

44.1% of Obalon Therapeutics shares are held by institutional investors. 16.4% of Obalon Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Cyberonics and Obalon Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cyberonics 15.33% 17.49% 15.23%
Obalon Therapeutics -459.54% -59.77% -47.02%

Cyberonics Company Profile

Cyberonics, Inc. is a medical device company. The Company is engaged in the design, development, sale and marketing of medical devices for epilepsy, depression and heart failure. Its seminal product, the VNS Therapy System, is an implantable device that provides neuromodulation therapy for the treatment of drug-resistant epilepsy and treatment-resistant depression (TRD). The Company’s VITARIA System is an implantable device that provides a form of neuromodulation therapy for the treatment of chronic heart failure (CHF). The VNS Therapy System and its VITARIA System include an implantable pulse generator to stimulate the vagus nerve; a lead that conducts current pulses from the pulse generator to the vagus nerve; a surgical instrument to assist with the implant procedure; equipment to enable the treating physician to set the pulse generator stimulation parameters for the patient; instruction manuals, and in the VNS Therapy System, magnets to suspend or induce stimulation manually.

Obalon Therapeutics Company Profile

Obalon Therapeutics, Inc. is a United States-based commercial-stage medical device company focused on developing and commercializing medical devices to treat obese and overweight people by facilitating weight loss. The Company’s product, Obalon balloon system, is a swallowable, gas-filled intragastric balloon designed to provide weight loss in obese patients. The Obalon balloon system is intended to be used as an adjunct to a moderate intensity diet and behavior modification program. All balloons must be removed six months after the first balloon is placed. The Obalon balloon system intends to provide patients and physicians with a reversible and repeatable weight loss solution in an outpatient setting, without altering patient anatomy or requiring surgery. The Company has received Premarket approval (PMA) for its Obalon balloon system based on the results of its United States pivotal clinical trial, referred to as the SMART trial.

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