Analyzing Spectral Medical (OTCMKTS:EDTXF) and Pulmonx (NASDAQ:LUNG)

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

Insider and Institutional Ownership

91.0% of Pulmonx shares are held by institutional investors. 5.7% of Pulmonx shares are held by company insiders. Comparatively, 1.5% of Spectral Medical shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pulmonx	$83.79 million	3.94	-$60.84 million	($1.44)	-5.75
Spectral Medical	$1.18 million	126.16	-$11.60 million	($0.07)	-7.47

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pulmonx	-67.31%	-55.36%	-33.53%
Spectral Medical	-1,245.87%	N/A	-351.89%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Pulmonx and Spectral Medical, as reported by MarketBeat.

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

Pulmonx currently has a consensus price target of $12.75, suggesting a potential upside of 53.89%. Given Pulmonx’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Pulmonx is more favorable than Spectral Medical.

Volatility & Risk

Pulmonx has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, Spectral Medical has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Summary

Pulmonx beats Spectral Medical on 9 of the 14 factors compared between the two stocks.

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.

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.