Zynex (NASDAQ:ZYXI – Get Free Report) and Nephros (NASDAQ:NEPH – Get Free Report) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.
Profitability
This table compares Zynex and Nephros’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Zynex | -68.35% | -804.30% | -36.67% |
| Nephros | 4.06% | 7.66% | 5.86% |
Earnings and Valuation
This table compares Zynex and Nephros”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zynex | $108.20 million | 0.04 | $2.99 million | ($2.43) | -0.05 |
| Nephros | $19.12 million | 2.03 | $1.19 million | $0.07 | 51.00 |
Zynex has higher revenue and earnings than Nephros. Zynex is trading at a lower price-to-earnings ratio than Nephros, 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 Zynex and Nephros, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zynex | 1 | 2 | 1 | 0 | 2.00 |
| Nephros | 0 | 1 | 1 | 0 | 2.50 |
Zynex presently has a consensus target price of $4.90, suggesting a potential upside of 3,820.00%. Nephros has a consensus target price of $6.00, suggesting a potential upside of 68.07%. Given Zynex’s higher possible upside, research analysts clearly believe Zynex is more favorable than Nephros.
Insider & Institutional Ownership
29.7% of Zynex shares are owned by institutional investors. Comparatively, 41.1% of Nephros shares are owned by institutional investors. 49.3% of Zynex shares are owned by company insiders. Comparatively, 6.7% of Nephros shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility & Risk
Zynex has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Nephros has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.
Summary
Nephros beats Zynex on 9 of the 13 factors compared between the two stocks.
About Zynex
Zynex, Inc., together with its subsidiaries, designs, manufactures, and markets medical devices to treat chronic and acute pain; and activate and exercise muscles for rehabilitative purposes with electrical stimulation. The company offers NexWave, a dual channel, multi-modality interferential current, transcutaneous electrical nerve stimulation, and neuromuscular electrical stimulation (NMES) device that is marketed to physicians and therapists by field sales representatives; NeuroMove, an electromyography and electric stimulation technology device; InWave, an electrical stimulation product for the treatment of female urinary incontinence; E-Wave, an NMES device; M-Wave, an NMES device. It also supplies private labeled products, including electrodes for the delivery of electrical current to the body, and batteries for use in electrotherapy products. In addition, the company distributes Comfortrac/Saunders for cervical traction, JetStream for hot/cold therapy, LSO Back Braces for lumbar support, and braces for rehabilitation support. Further, it offers Zynex Fluid Monitoring System (CM-1500); Zynex Wireless Fluid Monitoring System (CM-1600), a noninvasive monitoring device designed to measure relative changes in fluid volume in adult patients; NiCO CO-Oximeter, a laser-based noninvasive co-oximeter; and HemeOx tHb Oximeter, a laser-based total hemoglobin pulse oximeter. The company provides its products for use in pain management and control; stroke and spinal cord injury rehabilitation; hemodynamic monitoring and intravascular volume monitoring; and pulse oximetry monitoring. It sells its products through direct sales force primarily in the United States. Zynex, Inc. was founded in 1996 and is headquartered in Englewood, Colorado.
About Nephros
Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also manufactures and sells water filters that enhance the taste and odor of water, as well as reduce biofilm, cysts, particulates, and scale build-up in downstream equipment. It markets its products to food service, hospitality, convenience store, and health care markets, as well as medical institutions. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.
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