Head to Head Analysis: Stryker (NYSE:SYK) and Neuronetics (NASDAQ:STIM)

Neuronetics (NASDAQ:STIM) and Stryker (NYSE:SYK) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Risk & Volatility

Neuronetics has a beta of 2.25, suggesting that its share price is 125% more volatile than the S&P 500. Comparatively, Stryker has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Earnings & Valuation

This table compares Neuronetics and Stryker”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neuronetics	$72.71 million	0.49	-$30.19 million	($1.23)	-0.96
Stryker	$21.97 billion	6.76	$3.17 billion	$9.33	41.77

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

Insider and Institutional Ownership

53.6% of Neuronetics shares are held by institutional investors. Comparatively, 77.1% of Stryker shares are held by institutional investors. 9.8% of Neuronetics shares are held by insiders. Comparatively, 5.5% of Stryker shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Neuronetics and Stryker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neuronetics	-50.09%	-141.24%	-32.77%
Stryker	16.34%	23.07%	11.04%

Analyst Ratings

This is a summary of recent ratings for Neuronetics and Stryker, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neuronetics	0	1	3	0	2.75
Stryker	0	3	17	0	2.85

Neuronetics currently has a consensus price target of $4.67, indicating a potential upside of 297.16%. Stryker has a consensus price target of $398.40, indicating a potential upside of 2.22%. Given Neuronetics’ higher possible upside, equities analysts clearly believe Neuronetics is more favorable than Stryker.

Summary

Stryker beats Neuronetics on 11 of the 14 factors compared between the two stocks.

About Neuronetics

Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with neurohealth disorders in the United States and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrists. The company was incorporated in 2001 and is headquartered in Malvern, Pennsylvania.

About Stryker

Stryker Corporation operates as a medical technology company. The company operates through two segments, MedSurg and Neurotechnology, and Orthopaedics and Spine. The Orthopaedics and Spine segment provides implants for use in total joint replacements, such as hip, knee and shoulder, and trauma and extremities surgeries. This segment also offers spinal implant products comprising cervical and thoracolumbar systems that include fixation, minimally invasive and interbody systems used in spinal injury, complex spine and degenerative therapies. The MedSurg and Neurotechnology segment offers surgical equipment, and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, clinical communication and workflow solutions, and other medical device products that are used in various medical specialties, as well as patient and caregiver safety technologies. This segment also provides neurosurgical, neurovascular and craniomaxillofacial implant products, which include products used for minimally invasive endovascular procedures; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke; and craniomaxillofacial implant products, including cranial, maxillofacial, and chest wall devices, as well as dural substitutes and sealants. The company sells its products to doctors, hospitals, and other healthcare facilities through company-owned subsidiaries and branches, as well as third-party dealers and distributors in approximately 75 countries. Stryker Corporation was founded in 1941 and is headquartered in Portage, Michigan.