Fonar (NASDAQ:FONR) and Exagen (NASDAQ:XGN) Head-To-Head Contrast

Exagen (NASDAQ:XGN) and Fonar (NASDAQ:FONR) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Valuation and Earnings

This table compares Exagen and Fonar”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exagen	$55.64 million	2.89	-$15.11 million	($0.92)	-7.72
Fonar	$104.35 million	0.85	$8.33 million	$1.11	12.96

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

Profitability

This table compares Exagen and Fonar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Exagen	-29.94%	-113.48%	-30.28%
Fonar	7.08%	4.66%	3.48%

Institutional & Insider Ownership

75.3% of Exagen shares are held by institutional investors. Comparatively, 50.6% of Fonar shares are held by institutional investors. 12.6% of Exagen shares are held by insiders. Comparatively, 1.6% of Fonar shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Exagen and Fonar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exagen	1	0	8	0	2.78
Fonar	0	1	0	0	2.00

Exagen currently has a consensus price target of $14.17, suggesting a potential upside of 99.53%. Given Exagen’s stronger consensus rating and higher possible upside, research analysts clearly believe Exagen is more favorable than Fonar.

Risk & Volatility

Exagen has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Fonar has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

About Exagen

Exagen Inc. develops and commercializes various testing products under the AVISE brand in the United States. The company enables healthcare providers to care for patients through the diagnosis, prognosis, and monitoring of autoimmune and autoimmune-related diseases, including systemic lupus erythematosus (SLE) and rheumatoid arthritis (RA). Its lead testing product is AVISE CTD that enables differential diagnosis for patients presenting with symptoms indicative of various connective tissue diseases (CTDs) and other related diseases with overlapping symptoms. The company offers AVISE Lupus that measures activation of the complement system by quantifying the level of B-cell C4d and erythrocyte bound C4d in the patient's blood; and AVISE APS, which consists of a panel of autoantibody tests that aids in the diagnosis and management of APS. In addition, it provides AVISE Vasculitis AAV, which utilizes a testing panel of individual analytes to provide physicians with results in the assessment and monitoring of anti-neutrophil cytoplasmic antibody associated vasculitis; AVISE SLE Prognostic, a panel of autoantibodies for assessing the potential for complications affecting the kidney, brain, and cardiovascular system; and AVISE Anti-CarP test, which identifies RA patients with severe disease. Further, the company offers AVISE SLE Monitor, a biomarker blood test; AVISE MTX, a patented and validated blood test; and AVISE HCQ, a blood test to monitor levels of hydroxychloroquine. It has a research collaboration and license agreement with Allegheny Health Network (AHN) Research Institute to develop novel patented biomarkers. The company was formerly known as Exagen Diagnostics, Inc. and changed its name to Exagen Inc. in January 2019. Exagen Inc. was incorporated in 2002 and is headquartered in Vista, California.

About Fonar

FONAR Corporation, together with its subsidiaries, engages in the research, development, production, and marketing of magnetic resonance imaging (MRI) scanners for the detection and diagnosis of human diseases in the United States. The company operates in two segments, Medical Equipment, and Physician Management and Diagnostic Services. It provides Upright MRI scanner that allows patients to be scanned in weight-bearing conditions, such as standing, sitting, bending, or lying down. The company also offers non-medical management, including administrative services, billing and collection services, credentialing services, contract negotiations, compliance consulting, purchasing IT services, hiring, conducting interviews, training, supervision and management of non-medical personnel, storage of medical records, office space, equipment, repair maintenance services, accounting, assistance with compliance matters, and development and implementation of practice growth and marketing strategies. It owns and operates diagnostic imaging facilities in Florida; and manages MRI scanning facilities. The company markets its scanners to private diagnostic imaging centers and hospital outpatient imaging facilities. FONAR Corporation was founded in 1970 and is based in Melville, New York.