Contrasting Pulmonx (NASDAQ:LUNG) and Westaim (OTCMKTS:WEDXF)

Westaim (OTCMKTS:WEDXF) and Pulmonx (NASDAQ:LUNG) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Insider and Institutional Ownership

91.0% of Pulmonx shares are owned by institutional investors. 4.2% of Westaim shares are owned by company insiders. Comparatively, 5.7% of Pulmonx shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Westaim and Pulmonx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westaim	284.74%	7.76%	7.29%
Pulmonx	-72.01%	-53.88%	-33.47%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westaim	$8.63 million	52.72	$183.98 million	$0.29	12.24
Pulmonx	$79.30 million	3.34	-$60.84 million	($1.47)	-4.56

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

Analyst Recommendations

This is a summary of recent recommendations for Westaim and Pulmonx, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westaim	0	0	0	0	0.00
Pulmonx	0	2	4	0	2.67

Pulmonx has a consensus price target of $12.75, indicating a potential upside of 90.30%. Given Pulmonx’s stronger consensus rating and higher possible upside, analysts clearly believe Pulmonx is more favorable than Westaim.

Risk & Volatility

Westaim has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, Pulmonx has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.

About Pulmonx

Pulmonx Corporation, a commercial-stage medical technology company, provides minimally invasive devices for the treatment of chronic obstructive pulmonary diseases. The company offers Zephyr Endobronchial Valve, a solution for the treatment of patients with hyperinflation associated with severe emphysema; and Chartis Pulmonary Assessment System, a balloon catheter and console system with flow and pressure sensors that are used to assess the presence of collateral ventilation. It also offers StratX Lung Analysis Platform, a cloud-based quantitative computed tomography analysis service that offers information on emphysema destruction, fissure completeness, and lobar volume to help identify target lobes for the treatment with Zephyr Valves. The company serves emphysema patients in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company was formerly known as Pulmonx and changed its name to Pulmonx Corporation in December 2013. Pulmonx Corporation was incorporated in 1995 and is headquartered in Redwood City, California.