Financial Contrast: Neuronetics (NASDAQ:STIM) versus Cerus (NASDAQ:CERS)

Neuronetics (NASDAQ:STIM) and Cerus (NASDAQ:CERS) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Insider and Institutional Ownership

53.6% of Neuronetics shares are owned by institutional investors. Comparatively, 78.4% of Cerus shares are owned by institutional investors. 9.8% of Neuronetics shares are owned by company insiders. Comparatively, 3.4% of Cerus shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Neuronetics has a beta of 2.17, indicating that its stock price is 117% more volatile than the S&P 500. Comparatively, Cerus has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Profitability

This table compares Neuronetics and Cerus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neuronetics	-50.09%	-141.24%	-32.77%
Cerus	-11.60%	-40.55%	-11.12%

Analyst Ratings

This is a summary of current ratings and target prices for Neuronetics and Cerus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neuronetics	0	1	3	0	2.75
Cerus	0	1	3	0	2.75

Neuronetics currently has a consensus price target of $4.67, indicating a potential upside of 9.80%. Cerus has a consensus price target of $3.63, indicating a potential upside of 119.70%. Given Cerus’ higher possible upside, analysts plainly believe Cerus is more favorable than Neuronetics.

Earnings & Valuation

This table compares Neuronetics and Cerus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neuronetics	$72.71 million	1.77	-$30.19 million	($1.23)	-3.46
Cerus	$180.27 million	1.70	-$37.49 million	($0.11)	-15.00

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

Summary

Cerus beats Neuronetics on 7 of the 12 factors compared between the two stocks.

About Neuronetics

Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with neurohealth disorders in the United States and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrists. The company was incorporated in 2001 and is headquartered in Malvern, Pennsylvania.

About Cerus

Cerus Corporation operates as a biomedical products company. The company focuses on developing and commercializing the INTERCEPT Blood System to enhance blood safety. Its INTERCEPT Blood System, a proprietary technology for controlling biological replication that is designed to reduce blood-borne pathogens in donated blood components intended for transfusion. The company offers INTERCEPT Blood Systems for platelets and plasma, which is designed to inactivate blood-borne pathogens in platelets and plasma donated for transfusion; INTERCEPT Blood System for red blood cells to inactivate blood-borne pathogens in red blood cells donated for transfusion; and INTERCEPT Blood System for Cryoprecipitation that uses its plasma system to produce pathogen reduced cryoprecipitated fibrinogen complex for the treatment and control of bleeding, including massive hemorrhage associated with fibrinogen deficiency, as well as pathogen reduced plasma, cryoprecipitate reduced. It sells platelet and plasma systems through its direct sales force and distributors in the United States, Europe, the Commonwealth of Independent States, the Middle East, Latin America, and internationally. Cerus Corporation was incorporated in 1991 and is headquartered in Concord, California.