Comparing TELA Bio (NASDAQ:TELA) and Spectral Medical (OTCMKTS:EDTXF)

Spectral Medical (OTCMKTS:EDTXF) and TELA Bio (NASDAQ:TELA) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Institutional & Insider Ownership

94.3% of TELA Bio shares are owned by institutional investors. 1.5% of Spectral Medical shares are owned by company insiders. Comparatively, 6.0% of TELA Bio shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Spectral Medical and TELA Bio’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectral Medical	$1.18 million	123.34	-$11.60 million	($0.05)	-10.38
TELA Bio	$64.74 million	1.14	-$46.66 million	($1.67)	-1.80

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

Profitability

This table compares Spectral Medical and TELA Bio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectral Medical	-967.95%	N/A	-288.93%
TELA Bio	-65.04%	-252.57%	-56.63%

Analyst Ratings

This is a breakdown of current ratings for Spectral Medical and TELA Bio, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectral Medical	0	0	0	0	N/A
TELA Bio	0	0	4	0	3.00

TELA Bio has a consensus price target of $10.00, indicating a potential upside of 233.33%. Given TELA Bio’s higher probable upside, analysts plainly believe TELA Bio is more favorable than Spectral Medical.

Volatility & Risk

Spectral Medical has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, TELA Bio has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Summary

TELA Bio beats Spectral Medical on 9 of the 13 factors compared between the two stocks.

About Spectral Medical

Spectral Medical Inc. focuses on the development and commercialization of products for the treatment of septic shock in the United States, Italy, Ireland, and internationally. The company markets Endotoxin Activity Assay, a rapid in vitro diagnostic test for the detection of components of gram negative bacterial cell wall; and Polymyxin B Hemoperfusion, a therapeutic hemoperfusion device that removes endotoxin from the bloodstream. It also develops and manufactures monoclonal and polyclonal antibodies, recombinant cardiac proteins, and calibrators for use in the research and development, as well as products that are manufactured by other diagnostic companies. The company was formerly known as Spectral Diagnostics Inc. and changed its name to Spectral Medical Inc. in December 2014. Spectral Medical Inc. was incorporated in 1991 and is headquartered in Toronto, Canada.

About TELA Bio

TELA Bio, Inc., a commercial-stage medical technology company, focuses on providing soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient's anatomy. The company provides a portfolio of OviTex Reinforced Tissue Matrix (OviTex) products for hernia repair and abdominal wall reconstruction; and OviTex PRS Reinforced Tissue Matrix products to address the unmet needs in plastic and reconstructive surgery, as well as OviTex for Laparoscopic and Robotic Procedures, a sterile reinforced tissue matrix derived from ovine rumen with polypropylene fiber intended to be used in laparoscopic and robotic-assisted hernia surgical repairs. It markets its products through a single direct sales force, principally in the United States. The company was incorporated in 2012 and is headquartered in Malvern, Pennsylvania.