Contrasting iCAD (ICAD) and K2M Group (KTWO)

iCAD (NASDAQ:ICAD) and K2M Group (NASDAQ:KTWO) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.

Earnings & Valuation

This table compares iCAD and K2M Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
iCAD $28.10 million 2.24 -$14.25 million ($0.61) -6.16
K2M Group $258.03 million 4.66 -$37.14 million ($0.87) -31.61

iCAD has higher earnings, but lower revenue than K2M Group. K2M Group is trading at a lower price-to-earnings ratio than iCAD, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares iCAD and K2M Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
iCAD -37.29% -64.08% -25.38%
K2M Group -16.66% -19.69% -11.71%

Insider and Institutional Ownership

16.8% of iCAD shares are owned by institutional investors. 10.1% of iCAD shares are owned by company insiders. Comparatively, 6.0% of K2M Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for iCAD and K2M Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iCAD 0 0 0 0 N/A
K2M Group 0 6 1 0 2.14

K2M Group has a consensus target price of $26.80, suggesting a potential downside of 2.55%. Given K2M Group’s higher possible upside, analysts clearly believe K2M Group is more favorable than iCAD.

Volatility and Risk

iCAD has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, K2M Group has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500.

Summary

K2M Group beats iCAD on 8 of the 12 factors compared between the two stocks.

iCAD Company Profile

iCAD, Inc. provides image analysis, workflow solutions, and radiation therapy for the early identification and treatment of cancer in the United States and internationally. It operates through two segments, Cancer Detection and Cancer Therapy. The company provides electronic brachytherapy (eBX) products, including Axxent eBx systems for the treatment of early stage breast cancer, endometrial cancer, cervical cancer, and skin cancer, as well as for treating other cancers or conditions where radiation therapy is indicated comprising intraoperative radiation therapy. It also offers digital mammography computer-aided detection (CAD) products, such as advanced image analysis and workflow solutions in breast imaging, which include PowerLook Mammo Detection, which detects and identifies suspicious masses and micro-calcifications; and PowerLook Advanced Mammography Platform, a computer server residing on a customer's network that receives patient studies from the imaging modality, performs CAD and density assessment analysis, and sends the CAD results to picture archiving and communication system and/or review workstations. In addition, the company's digital mammography CAD products comprise magnetic resonance imaging products to detect breast and prostate cancer; breast tomosynthesis systems; and advanced image analysis and workflow solutions in computed tomography (CT) colonography, including VeraLook that supports the detection of colonic polyps in conjunction with CT colonography. It serves hospitals, ambulatory care centers and free standing radiation oncology facilities, and other office-based uses through sales organizations, as well as through various original equipment manufacturer partners, distributors, and resellers. iCAD, Inc. has a strategic partnership agreement with Invivo Corp. The company was formerly known as Howtek, Inc. and changed its name to iCAD, Inc. in June 2002. iCAD, Inc. was founded in 1984 and is headquartered in Nashua, New Hampshire.

K2M Group Company Profile

K2M Group Holdings, Inc., a medical device company, provides spine and minimally invasive solutions in the United States and internationally. The company offers implants, disposables, and instruments primarily to hospitals for use by spine surgeons to treat spinal pathologies, such as deformity, trauma, and tumor. Its complex spine products include EVEREST, MESA, and MESA 2 deformity spinal systems; NILE alternative and proximal fixation spinal systems; MESA rail deformity spinal systems; Cricket spinal correction rod reduction instrumentation; CAPRI corpectomy cage systems; MESA small stature, rail small stature, and mini spinal systems; SERENGETI complex spine minimally invasive retractor systems; RAVINE complex spine lateral access systems; SANTORINI corpectomy cage systems; YUKON OCT spinal systems; and PALO ALTO cervical static corpectomy cage systems. The company's minimally invasive surgery products consist of EVEREST minimally invasive spinal and XT spinal, SERENGETI minimally invasive retractor, MOJAVE PL 3D expandable interbody, RAVINE lateral access, CASCADIA lateral 3D interbody, ALEUTIAN lateral interbody, and TERRA NOVA minimally invasive access systems. In addition, its degenerative spine products comprise EVEREST degenerative spinal, CASCADIA and ALEUTIAN interbody, SAHARA AL expandable stabilization, RHINE cervical disc, CHESAPEAKE interbody, PYRENEES cervical plate, and BLUE RIDGE hybrid cervical plate systems. Further, the company provides Balance ACS, a platform that includes tools to assist surgeons with obtaining authorization from healthcare insurers. K2M Group Holdings, Inc. markets and sells its products through direct sales employees, independent sales agencies, and distributor partners. The company was founded in 2004 and is headquartered in Leesburg, Virginia.

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