Reviewing NeuroPace (NASDAQ:NPCE) and NEXGEL (NASDAQ:NXGL)

NeuroPace (NASDAQ:NPCE) and NEXGEL (NASDAQ:NXGL) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Risk & Volatility

NeuroPace has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500. Comparatively, NEXGEL has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Valuation and Earnings

This table compares NeuroPace and NEXGEL”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NeuroPace	$76.45 million	4.17	-$32.96 million	($1.00)	-10.67
NEXGEL	$6.73 million	4.74	-$3.16 million	($0.58)	-8.10

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

Insider & Institutional Ownership

78.8% of NeuroPace shares are owned by institutional investors. Comparatively, 2.2% of NEXGEL shares are owned by institutional investors. 22.2% of NeuroPace shares are owned by company insiders. Comparatively, 24.9% of NEXGEL shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NeuroPace	-36.74%	-205.41%	-28.29%
NEXGEL	-52.60%	-71.19%	-34.79%

Analyst Recommendations

This is a summary of recent ratings and price targets for NeuroPace and NEXGEL, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NeuroPace	0	1	5	0	2.83
NEXGEL	0	0	0	0	0.00

NeuroPace currently has a consensus price target of $15.00, indicating a potential upside of 40.58%. Given NeuroPace’s stronger consensus rating and higher probable upside, research analysts clearly believe NeuroPace is more favorable than NEXGEL.

Summary

NeuroPace beats NEXGEL 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 NEXGEL

NEXGEL, Inc. manufactures high water content, electron beam cross-linked, and aqueous polymer hydrogels and gels. Its products are used for wound care, medical diagnostics, transdermal drug delivery, and cosmetics. The company was formerly known as AquaMed Technologies, Inc. and changed its name to NEXGEL, Inc. in November 2019. The company was incorporated in 2009 and is based in Langhorne, Pennsylvania.