Critical Analysis: Aethlon Medical (NASDAQ:AEMD) and Biostage (OTCMKTS:BSTG)

Aethlon Medical (NASDAQ:AEMD) and Biostage (OTCMKTS:BSTG) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Volatility and Risk

Aethlon Medical has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500. Comparatively, Biostage has a beta of -1.02, indicating that its stock price is 202% less volatile than the S&P 500.

Earnings & Valuation

This table compares Aethlon Medical and Biostage”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aethlon Medical	$570,000.00	17.50	-$12.21 million	($2.82)	-0.25
Biostage	N/A	N/A	-$6.07 million	($0.58)	-7.67

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

Insider and Institutional Ownership

2.0% of Aethlon Medical shares are held by institutional investors. 1.1% of Aethlon Medical shares are held by company insiders. Comparatively, 15.3% of Biostage shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Aethlon Medical and Biostage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aethlon Medical	N/A	-160.36%	-115.74%
Biostage	N/A	N/A	-174.43%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Aethlon Medical and Biostage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aethlon Medical	0	0	1	0	3.00
Biostage	0	0	0	0	0.00

Aethlon Medical currently has a consensus target price of $7.00, indicating a potential upside of 879.71%. Given Aethlon Medical’s stronger consensus rating and higher possible upside, research analysts clearly believe Aethlon Medical is more favorable than Biostage.

Summary

Aethlon Medical beats Biostage on 8 of the 12 factors compared between the two stocks.

About Aethlon Medical

Aethlon Medical, Inc., a medical therapeutic company, focuses on developing products to treat cancer and life-threatening infectious diseases in the United States. It develops Hemopurifier, a clinical-stage immunotherapeutic device that removes tumor-derived exosomes and life-threatening viruses and use in organ transplantation. The company was incorporated in 1999 and is based in San Diego, California.

About Biostage

Biostage, Inc., a biotechnology company, offers products to cure patients of cancers, injuries, and birth defects of the gastro-intestinal tract and the airways. The company's pipeline includes organ-regeneration technology for the repair or replacement of diseased or damaged organs, as well as product candidates to treat cancer, injury, and birth defects of the bronchus. Its lead product candidate is Biostage Esophageal Implant for the treatment of severe esophageal disease. The company was formerly known as Harvard Apparatus Regenerative Technology, Inc. and changed its name to Biostage, Inc. in March 2016. Biostage, Inc. was founded in 2009 and is headquartered in Holliston, Massachusetts.