Critical Survey: Tactile Systems Technology (NASDAQ:TCMD) versus TerrAscend (OTCMKTS:TSNDF)

TerrAscend (OTCMKTS:TSNDF) and Tactile Systems Technology (NASDAQ:TCMD) are both small-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Insider and Institutional Ownership

5.8% of TerrAscend shares are held by institutional investors. Comparatively, 83.4% of Tactile Systems Technology shares are held by institutional investors. 31.9% of TerrAscend shares are held by insiders. Comparatively, 2.1% of Tactile Systems Technology shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares TerrAscend and Tactile Systems Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TerrAscend	-31.01%	-32.93%	-5.49%
Tactile Systems Technology	7.10%	11.49%	9.17%

Volatility & Risk

TerrAscend has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Tactile Systems Technology has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Earnings and Valuation

This table compares TerrAscend and Tactile Systems Technology”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TerrAscend	$260.56 million	0.80	-$81.33 million	($0.11)	-6.15
Tactile Systems Technology	$329.52 million	1.49	$19.09 million	$1.08	20.12

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

Analyst Ratings

This is a summary of recent recommendations for TerrAscend and Tactile Systems Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TerrAscend	0	1	0	1	3.00
Tactile Systems Technology	0	2	4	0	2.67

Tactile Systems Technology has a consensus price target of $38.40, indicating a potential upside of 76.71%. Given Tactile Systems Technology’s higher probable upside, analysts plainly believe Tactile Systems Technology is more favorable than TerrAscend.

Summary

Tactile Systems Technology beats TerrAscend on 11 of the 15 factors compared between the two stocks.

About TerrAscend

TerrAscend Corp. cultivates, processes, and sells medical and adult use cannabis in Canada and the United States. The company produces and distributes hemp-derived wellness products to retail locations; and manufactures vaporizables, concentrates, topicals, tinctures and edibles. It also operates retail dispensaries under the Apothecarium and State Flower brand names. The company was incorporated in 2017 and is headquartered in Mississauga, Canada.

About Tactile Systems Technology

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices to treat underserved chronic diseases in the United States. It offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema in the home setting; and Entre Plus System, a portable pneumatic compression device for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers. The company also provides Kylee, a mobile application to help patients learn about lymphedema, track their symptoms, and treatment, as well as to share their progress with their doctor; and AffloVest, a portable high frequency chest wall oscillation vest to treat patients with retained pulmonary secretions resulting from bronchiectasis, cystic fibrosis, and various neuromuscular disorders. Tactile Systems Technology, Inc. was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.