Critical Comparison: AtriCure (ATRC) versus iCAD (ICAD)

AtriCure (NASDAQ:ATRC) and iCAD (NASDAQ:ICAD) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings for AtriCure and iCAD, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AtriCure 0 1 4 0 2.80
iCAD 0 0 0 0 N/A

AtriCure currently has a consensus price target of $35.75, suggesting a potential upside of 11.93%. Given AtriCure’s higher probable upside, analysts plainly believe AtriCure is more favorable than iCAD.

Profitability

This table compares AtriCure and iCAD’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AtriCure -10.41% -16.92% -9.99%
iCAD -37.29% -64.08% -25.38%

Institutional and Insider Ownership

86.1% of AtriCure shares are held by institutional investors. Comparatively, 16.9% of iCAD shares are held by institutional investors. 8.7% of AtriCure shares are held by company insiders. Comparatively, 10.1% of iCAD shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

AtriCure has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, iCAD has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Valuation and Earnings

This table compares AtriCure and iCAD’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AtriCure $174.72 million 7.04 -$26.89 million ($0.83) -38.48
iCAD $28.10 million 3.15 -$14.25 million ($0.61) -8.41

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

Summary

AtriCure beats iCAD on 8 of the 13 factors compared between the two stocks.

AtriCure Company Profile

AtriCure, Inc. provides atrial fibrillation solutions to medical centers in the United States and internationally. The company offers Isolator Synergy and Isolator Synergy Access clamps for the treatment of persistent and long-standing persistent atrial fibrillation concomitant to other open-heart surgical procedures; COBRA Fusion surgical ablation system to combine bipolar temperature-controlled radio frequency energy control with monopolar energy; and EPi-Sense guided coagulation system used for the temporary cardiac signal sensing and recording during surgery. It also provides SUBTLE cannula, an access device and conduit for the ablation device and endoscope to enable a closed chest endoscopic approach; multifunctional pens that allow surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation and ablate cardiac tissue with the same device; and linear ablation devices, which enable physicians to create an expanded cardiac ablation lesion set. In addition, the company offers cryoICE cryoablation system used to ablate cardiac tissue for the treatment of cardiac arrhythmias; AtriClip system used to occlude the left atrial appendage by mechanically clamping the appendage; and CryoICE CRYO2 cryoablation system to apply cryo-energy to targeted intercostal peripheral nerves in the ribcage and temporarily relieve pain. Further, it provides Lumitip dissector to separate tissues to provide access to key anatomical structures that are targeted for ablation; Fusion Magnetic Retriever System that allows access around anatomical structures; and cardiac surgery instruments, which are used during surgical procedures for repair or replacement of certain heart valves. AtriCure sells its products through independent distributors and direct sales personnel. The company was founded in 2000 and is headquartered in Mason, Ohio.

iCAD Company Profile

iCAD, Inc. provides image analysis, workflow solutions, and radiation therapy for the early identification and treatment of cancer in the United States and internationally. It operates through two segments, Cancer Detection and Cancer Therapy. The company provides electronic brachytherapy (eBX) products, including Axxent eBx systems for the treatment of early stage breast cancer, endometrial cancer, cervical cancer, and skin cancer, as well as for treating other cancers or conditions where radiation therapy is indicated comprising intraoperative radiation therapy. It also offers digital mammography computer-aided detection (CAD) products, such as advanced image analysis and workflow solutions in breast imaging, which include PowerLook Mammo Detection, which detects and identifies suspicious masses and micro-calcifications; and PowerLook Advanced Mammography Platform, a computer server residing on a customer's network that receives patient studies from the imaging modality, performs CAD and density assessment analysis, and sends the CAD results to picture archiving and communication system and/or review workstations. In addition, the company's digital mammography CAD products comprise magnetic resonance imaging products to detect breast and prostate cancer; breast tomosynthesis systems; and advanced image analysis and workflow solutions in computed tomography (CT) colonography, including VeraLook that supports the detection of colonic polyps in conjunction with CT colonography. It serves hospitals, ambulatory care centers and free standing radiation oncology facilities, and other office-based uses through sales organizations, as well as through various original equipment manufacturer partners, distributors, and resellers. iCAD, Inc. has a strategic partnership agreement with Invivo Corp. The company was formerly known as Howtek, Inc. and changed its name to iCAD, Inc. in June 2002. iCAD, Inc. was founded in 1984 and is headquartered in Nashua, New Hampshire.

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