Outset Medical (NASDAQ:OM – Get Free Report) and Inspire Medical Systems (NYSE:INSP – Get Free Report) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.
Risk & Volatility
Outset Medical has a beta of 2.14, indicating that its share price is 114% more volatile than the S&P 500. Comparatively, Inspire Medical Systems has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
Profitability
This table compares Outset Medical and Inspire Medical Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Outset Medical | -82.06% | -97.17% | -32.84% |
| Inspire Medical Systems | 6.17% | 10.38% | 8.93% |
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Outset Medical | $113.69 million | 2.26 | -$127.98 million | ($20.29) | -0.71 |
| Inspire Medical Systems | $802.80 million | 2.78 | $53.51 million | $1.73 | 43.62 |
Inspire Medical Systems has higher revenue and earnings than Outset Medical. Outset Medical is trading at a lower price-to-earnings ratio than Inspire Medical Systems, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
94.9% of Inspire Medical Systems shares are owned by institutional investors. 2.4% of Outset Medical shares are owned by insiders. Comparatively, 2.3% of Inspire Medical Systems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations and price targets for Outset Medical and Inspire Medical Systems, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Outset Medical | 0 | 1 | 1 | 1 | 3.00 |
| Inspire Medical Systems | 0 | 7 | 7 | 0 | 2.50 |
Outset Medical presently has a consensus target price of $24.67, suggesting a potential upside of 70.23%. Inspire Medical Systems has a consensus target price of $154.43, suggesting a potential upside of 104.64%. Given Inspire Medical Systems’ higher possible upside, analysts clearly believe Inspire Medical Systems is more favorable than Outset Medical.
Summary
Inspire Medical Systems beats Outset Medical on 11 of the 15 factors compared between the two stocks.
About Outset Medical
Outset Medical, Inc., a medical technology company, engages in the development of a hemodialysis system for hemodialysis in the United States. The company offers Tablo Hemodialysis System, a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings; and manufactures, supports, and distributes for Tablo console, Tablo cartridge, and other consumables. It also provides Tablo Data Ecosystem, including TabloHub, a customer-facing portal; MyTablo, a patient-facing portal; and TabloDash, an internal data analytics platform. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.
About Inspire Medical Systems
Inspire Medical Systems, Inc., a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA) in the United States and internationally. The company offers Inspire system, a neurostimulation technology that provides a safe and effective treatment for moderate to severe OSA. It also develops a novel, closed-loop solution that continuously monitors a patient's breathing and delivers mild hypoglossal nerve stimulation to maintain an open airway. The company was incorporated in 2007 and is headquartered in Golden Valley, Minnesota.
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