Analyzing NeuroPace (NASDAQ:NPCE) & Cerus (NASDAQ:CERS)

NeuroPace (NASDAQ:NPCE) and Cerus (NASDAQ:CERS) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Institutional & Insider Ownership

78.8% of NeuroPace shares are owned by institutional investors. Comparatively, 78.4% of Cerus shares are owned by institutional investors. 22.2% of NeuroPace shares are owned by insiders. Comparatively, 3.4% of Cerus shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NeuroPace	-36.74%	-205.41%	-28.29%
Cerus	-11.19%	-37.90%	-10.35%

Volatility & Risk

NeuroPace has a beta of 1.79, suggesting that its stock price is 79% more volatile than the S&P 500. Comparatively, Cerus has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares NeuroPace and Cerus”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NeuroPace	$76.45 million	3.79	-$32.96 million	($1.00)	-9.70
Cerus	$176.23 million	1.89	-$37.49 million	($0.11)	-16.27

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

Analyst Ratings

This is a summary of recent ratings for NeuroPace and Cerus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NeuroPace	0	1	5	0	2.83
Cerus	0	1	3	0	2.75

NeuroPace currently has a consensus price target of $14.60, indicating a potential upside of 50.52%. Cerus has a consensus price target of $3.63, indicating a potential upside of 102.51%. Given Cerus’ higher possible upside, analysts plainly believe Cerus is more favorable than NeuroPace.

Summary

NeuroPace beats Cerus on 8 of the 14 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 Cerus

Cerus Corporation operates as a biomedical products company. The company focuses on developing and commercializing the INTERCEPT Blood System to enhance blood safety. Its INTERCEPT Blood System, a proprietary technology for controlling biological replication that is designed to reduce blood-borne pathogens in donated blood components intended for transfusion. The company offers INTERCEPT Blood Systems for platelets and plasma, which is designed to inactivate blood-borne pathogens in platelets and plasma donated for transfusion; INTERCEPT Blood System for red blood cells to inactivate blood-borne pathogens in red blood cells donated for transfusion; and INTERCEPT Blood System for Cryoprecipitation that uses its plasma system to produce pathogen reduced cryoprecipitated fibrinogen complex for the treatment and control of bleeding, including massive hemorrhage associated with fibrinogen deficiency, as well as pathogen reduced plasma, cryoprecipitate reduced. It sells platelet and plasma systems through its direct sales force and distributors in the United States, Europe, the Commonwealth of Independent States, the Middle East, Latin America, and internationally. Cerus Corporation was incorporated in 1991 and is headquartered in Concord, California.