Financial Analysis: Masimo (NASDAQ:MASI) versus NeuroPace (NASDAQ:NPCE)

NeuroPace (NASDAQ:NPCE) and Masimo (NASDAQ:MASI) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares NeuroPace and Masimo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NeuroPace	-21.67%	-108.20%	-18.50%
Masimo	4.90%	31.33%	13.93%

Risk and Volatility

NeuroPace has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, Masimo has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for NeuroPace and Masimo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NeuroPace	1	1	4	2	2.88
Masimo	0	9	0	0	2.00

NeuroPace presently has a consensus target price of $18.83, suggesting a potential upside of 10.07%. Masimo has a consensus target price of $180.40, suggesting a potential upside of 0.25%. Given NeuroPace’s stronger consensus rating and higher possible upside, equities analysts plainly believe NeuroPace is more favorable than Masimo.

Valuation and Earnings

This table compares NeuroPace and Masimo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NeuroPace	$99.99 million	5.83	-$21.47 million	($0.65)	-26.32
Masimo	$1.56 billion	6.05	-$151.50 million	($10.54)	-17.07

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

Institutional & Insider Ownership

78.8% of NeuroPace shares are held by institutional investors. Comparatively, 86.0% of Masimo shares are held by institutional investors. 20.5% of NeuroPace shares are held by insiders. Comparatively, 9.7% of Masimo shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

NeuroPace beats Masimo on 8 of the 15 factors compared between the two stocks.

About NeuroPace

NeuroPace, Inc. operates as a medical device company in the United States. The company develops RNS system, a brain-responsive neuromodulation system that delivers personalized, real-time treatment at the seizure source for treating medically refractory focal epilepsy. It also records continuous brain activity data and enables clinicians to monitor patients in person and remotely. Its RNS System includes RNS neurostimulator, cortical strip and depth leads, and Patient Remote Monitor, as well as other implantable and non-implantable accessories. The company sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures. NeuroPace, Inc. was incorporated in 1997 and is headquartered in Mountain View, California.

About Masimo

Masimo Corporation develops, manufactures, and markets various patient monitoring technologies, and automation and connectivity solutions worldwide. The company offers masimo signal extraction technology (SET) pulse oximetry with measure-through motion and low perfusion pulse oximetry monitoring to address the primary limitations of conventional pulse oximetry; Masimo rainbow SET platform, including rainbow SET Pulse CO-Oximetry products that allows noninvasive monitoring of carboxyhemoglobin, methemoglobin, hemoglobin concentration, fractional arterial oxygen saturation, oxygen content, pleth variability index, rainbow pleth variability index, respiration rate from the pleth, and oxygen reserve index, as well as acoustic respiration monitoring, SedLine brain function monitoring, NomoLine capnography and gas monitoring, and regional oximetry. It also provides brain function and hemodynamic monitoring solutions; patient position and activity tracking, and neuromodulation technology solutions; and Masimo Hospital Automation platform, including hospital automation solutions, including Patient SafetyNet, Patient SafetyNet Surveillance, SafetyNet, Replica, Iris, MyView, UniView, Uniview: 60, Masimo Sleep, Centroid, and Bridg; and nasal high-flow ventilation, neuromodulation therapeutics, and telehealth solutions. In addition, the company provides its products through direct sales force, distributors, and original equipment manufacturers partners to hospitals, emergency medical service and home care providers, long-term care facilities, physician offices, veterinarians, and consumers; and home wellness products through e-commerce internet sites, such as masimopersonalhealth.com, amazon.com, and shopify.com. Masimo Corporation was incorporated in 1989 and is headquartered in Irvine, California.