Critical Comparison: Spectral Diagnostics (OTCMKTS:EDTXF) & DarioHealth (NASDAQ:DRIO)

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

Institutional & Insider Ownership

33.4% of DarioHealth shares are owned by institutional investors. 3.5% of DarioHealth shares are owned by insiders. Comparatively, 1.5% of Spectral Diagnostics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares DarioHealth and Spectral Diagnostics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DarioHealth	-192.23%	-60.52%	-37.08%
Spectral Diagnostics	-1,378.12%	N/A	-627.93%

Analyst Recommendations

This is a summary of recent ratings and price targets for DarioHealth and Spectral Diagnostics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DarioHealth	1	1	1	0	2.00
Spectral Diagnostics	0	0	0	0	0.00

DarioHealth presently has a consensus price target of $10.50, indicating a potential upside of 44.23%. Given DarioHealth’s stronger consensus rating and higher possible upside, research analysts clearly believe DarioHealth is more favorable than Spectral Diagnostics.

Earnings and Valuation

This table compares DarioHealth and Spectral Diagnostics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DarioHealth	$22.36 million	2.38	-$41.71 million	($8.88)	-0.82
Spectral Diagnostics	$1.75 million	157.54	-$34.13 million	($0.10)	-9.39

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

Volatility and Risk

DarioHealth has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Spectral Diagnostics has a beta of 0.11, indicating that its stock price is 89% less volatile than the S&P 500.

Summary

DarioHealth beats Spectral Diagnostics on 10 of the 14 factors compared between the two stocks.

About DarioHealth

DarioHealth Corp. operates as a digital health company in the United States, Canada, the European Union, Australia, and New Zealand. Its digital therapeutics platform and suite of solutions deliver personalized and dynamic interventions driven by data analytics and one-on-one coaching for diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health. The company offers Dario Evolve, a metabolic solution to address metabolic health needs, such as diabetes, pre-diabetes, hypertension, and weight management; Dario Move, which address most common musculoskeletal conditions; Dario Elevate, a behavioral health solution that optimizes access to evidence-based care; and Dario One, a full suite of chronic condition management solution; and Dario blood glucose monitoring systems. It also provides native devices, such as glucose meter, blood pressure cuff, digital scale, and biofeedback sensor device, as well as live coaching services. The company was formerly known as LabStyle Innovations Corp. and changed its name to DarioHealth Corp. in July 2016. DarioHealth Corp. was incorporated in 2011 and is based in New York, New York.

About Spectral Diagnostics

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.