Reviewing TearLab (OTCMKTS:TEAR) and AxoGen (NASDAQ:AXGN)

AxoGen (NASDAQ:AXGN) and TearLab (OTCMKTS:TEAR) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for AxoGen and TearLab, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AxoGen	1	0	9	0	2.80
TearLab	0	0	0	0	0.00

AxoGen currently has a consensus target price of $39.75, indicating a potential upside of 15.42%. Given AxoGen’s stronger consensus rating and higher possible upside, equities research analysts clearly believe AxoGen is more favorable than TearLab.

Earnings & Valuation

This table compares AxoGen and TearLab”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AxoGen	$225.21 million	7.94	-$15.70 million	($0.34)	-101.29
TearLab	N/A	N/A	N/A	N/A	N/A

TearLab has lower revenue, but higher earnings than AxoGen.

Profitability

This table compares AxoGen and TearLab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AxoGen	-6.97%	-13.44%	-7.48%
TearLab	N/A	N/A	N/A

Insider & Institutional Ownership

80.3% of AxoGen shares are owned by institutional investors. 2.8% of AxoGen shares are owned by company insiders. Comparatively, 5.2% of TearLab shares are owned 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.

Summary

AxoGen beats TearLab on 5 of the 9 factors compared between the two stocks.

About AxoGen

AxoGen, Inc., together with its subsidiaries, develops and commercializes technologies for peripheral nerve regeneration and repair worldwide. The company’s products include Avance Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site; AxoGuard Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed peripheral nerves; AxoGuard Nerve Protector, a porcine submucosa ECM product that is used to wrap and protect damaged peripheral nerves, as well as reinforces the nerve reconstruction while preventing soft tissue attachments; and Axoguard HA+ Nerve Protector, a processed porcine submucosa ECM base layer with a hyaluronate-alginate gel coating designed to provide short- and long-term protection for peripheral nerve injuries. Its products also comprise Axoguard Nerve Cap, a porcine submucosa ECM product that is used to protect a peripheral nerve end, as well as separates the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma; and AxoTouch two-point discriminator, a tool that is used for measuring the innervation density of surface area of the skin. The company provides its products to hospitals, surgery centers, and military hospitals, plastic reconstructive surgeons, orthopedic and plastic hand surgeons, and various oral and maxillofacial surgeons. AxoGen, Inc. is headquartered in Alachua, Florida.

About TearLab

TearLab Corporation operates as an in-vitro diagnostic company in the United States and internationally. It offers TearLab Osmolority System, a proprietary in vitro diagnostic tear testing platform that measures tear film osmolarity for the diagnosis of dry eye disease; and enables eye care practitioners to test for sensitive and specific biomarkers using nanoliters of tear film at the point-of-care. Its TearLab Osmolarity System consists of TearLab disposable, a single-use microfluidic microchip; TearLab pen, a hand-held device that interfaces with the TearLab disposable; and TearLab reader, a small desktop unit that allows for the docking of the TearLab pen, as well as provides a quantitative reading for the operator. The company was formerly known as OccuLogix, Inc. TearLab Corporation was founded in 1996 and is headquartered in San Diego, California.