Exagen (NASDAQ:XGN – Get Free Report) and Nephros (NASDAQ:NEPH – Get Free Report) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Profitability
This table compares Exagen and Nephros’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Exagen | -29.94% | -113.48% | -30.28% |
| Nephros | 8.26% | 15.81% | 12.22% |
Analyst Ratings
This is a breakdown of current ratings and target prices for Exagen and Nephros, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Exagen | 1 | 0 | 8 | 0 | 2.78 |
| Nephros | 0 | 1 | 1 | 0 | 2.50 |
Institutional and Insider Ownership
75.3% of Exagen shares are owned by institutional investors. Comparatively, 41.1% of Nephros shares are owned by institutional investors. 12.6% of Exagen shares are owned by insiders. Comparatively, 6.7% of Nephros shares are owned by 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.
Volatility and Risk
Exagen has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Nephros has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.
Earnings and Valuation
This table compares Exagen and Nephros”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Exagen | $55.64 million | 2.86 | -$15.11 million | ($0.92) | -7.64 |
| Nephros | $17.93 million | 2.88 | $70,000.00 | $0.13 | 37.38 |
Nephros has lower revenue, but higher earnings than Exagen. Exagen is trading at a lower price-to-earnings ratio than Nephros, indicating that it is currently the more affordable of the two stocks.
About Exagen
Exagen Inc. develops and commercializes various testing products under the AVISE brand in the United States. The company enables healthcare providers to care for patients through the diagnosis, prognosis, and monitoring of autoimmune and autoimmune-related diseases, including systemic lupus erythematosus (SLE) and rheumatoid arthritis (RA). Its lead testing product is AVISE CTD that enables differential diagnosis for patients presenting with symptoms indicative of various connective tissue diseases (CTDs) and other related diseases with overlapping symptoms. The company offers AVISE Lupus that measures activation of the complement system by quantifying the level of B-cell C4d and erythrocyte bound C4d in the patient's blood; and AVISE APS, which consists of a panel of autoantibody tests that aids in the diagnosis and management of APS. In addition, it provides AVISE Vasculitis AAV, which utilizes a testing panel of individual analytes to provide physicians with results in the assessment and monitoring of anti-neutrophil cytoplasmic antibody associated vasculitis; AVISE SLE Prognostic, a panel of autoantibodies for assessing the potential for complications affecting the kidney, brain, and cardiovascular system; and AVISE Anti-CarP test, which identifies RA patients with severe disease. Further, the company offers AVISE SLE Monitor, a biomarker blood test; AVISE MTX, a patented and validated blood test; and AVISE HCQ, a blood test to monitor levels of hydroxychloroquine. It has a research collaboration and license agreement with Allegheny Health Network (AHN) Research Institute to develop novel patented biomarkers. The company was formerly known as Exagen Diagnostics, Inc. and changed its name to Exagen Inc. in January 2019. Exagen Inc. was incorporated in 2002 and is headquartered in Vista, California.
About Nephros
Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also manufactures and sells water filters that enhance the taste and odor of water, as well as reduce biofilm, cysts, particulates, and scale build-up in downstream equipment. It markets its products to food service, hospitality, convenience store, and health care markets, as well as medical institutions. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.
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