Analyzing Forrester Research (FORR) and CareDx (CDNA)

CareDx (NASDAQ: CDNA) and Forrester Research (NASDAQ:FORR) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitabiliy, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

CareDx has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Forrester Research has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Institutional and Insider Ownership

36.5% of CareDx shares are owned by institutional investors. Comparatively, 54.0% of Forrester Research shares are owned by institutional investors. 5.4% of CareDx shares are owned by company insiders. Comparatively, 46.6% of Forrester Research shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares CareDx and Forrester Research’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CareDx $45.65 million 0.52 -$11.23 million ($2.01) -0.55
Forrester Research $325.89 million 2.15 $39.55 million $1.05 37.62

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

Analyst Ratings

This is a summary of recent recommendations and price targets for CareDx and Forrester Research, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CareDx 0 0 0 0 N/A
Forrester Research 0 1 1 0 2.50

Profitability

This table compares CareDx and Forrester Research’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CareDx -77.02% -69.67% -20.13%
Forrester Research 5.95% 13.85% 6.04%

Dividends

Forrester Research pays an annual dividend of $0.76 per share and has a dividend yield of 1.9%. CareDx does not pay a dividend. Forrester Research pays out 72.4% of its earnings in the form of a dividend.

Summary

Forrester Research beats CareDx on 11 of the 13 factors compared between the two stocks.

About CareDx

CareDx, Inc. is a molecular diagnostics company. The Company is focused on the discovery, development and commercialization of clinically differentiated diagnostic surveillance solutions for transplant patients. The Company’s commercialized testing solution, the AlloMap heart transplant molecular test (AlloMap), is a gene expression test that helps clinicians monitor and identify heart transplant recipients with stable graft function having a low probability of moderate/severe acute cellular rejection. Its products under development for transplant monitoring include AlloSure, a development-stage transplant surveillance solution, which applies next generation sequencing to detect and quantitate genetic differences between donor-derived cell-free deoxyribonucleic acid (dd-cfDNA) in the blood stream emanating from the donor heart. It offers the AlloMap Score Variability service, which provides complementary information to help personalize long-term care of heart transplant recipients.

About Forrester Research

Forrester Research, Inc. (Forrester) is an independent research, data, and advisory services firm. The Company offers research, data, advisory and related services that are thematic, prescriptive and executable, and that provide a perspective on the changing business environment. Its segments include Research, Product and Project Consulting. The Research segment is responsible for writing the research and performing the Webinars and inquiries for its Research and Connect products. The Product segment includes the product management organization that is responsible for product pricing and packaging and the launch of new products. In addition, this segment includes its Data, Connect and Events organizations. The Project Consulting segment offers project consulting services. Its products and services are categorized into Forrester Research, Forrester Connect, Forrester Data, Forrester Consulting and Forrester Events.

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