Spectral AI (NASDAQ:MDAI – Get Free Report) and Neuronetics (NASDAQ:STIM – Get Free Report) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.
Institutional & Insider Ownership
67.1% of Spectral AI shares are held by institutional investors. Comparatively, 53.6% of Neuronetics shares are held by institutional investors. 30.7% of Spectral AI shares are held by insiders. Comparatively, 9.8% of Neuronetics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Spectral AI and Neuronetics”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Spectral AI | $29.58 million | 1.47 | -$15.31 million | ($0.74) | -1.91 |
| Neuronetics | $74.89 million | 1.21 | -$43.71 million | ($0.82) | -1.62 |
Spectral AI has higher earnings, but lower revenue than Neuronetics. Spectral AI is trading at a lower price-to-earnings ratio than Neuronetics, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Spectral AI and Neuronetics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Spectral AI | -70.64% | N/A | -27.57% |
| Neuronetics | -33.88% | -131.15% | -31.26% |
Analyst Ratings
This is a breakdown of current recommendations for Spectral AI and Neuronetics, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Spectral AI | 1 | 0 | 2 | 0 | 2.33 |
| Neuronetics | 1 | 0 | 1 | 0 | 2.00 |
Spectral AI currently has a consensus target price of $3.25, indicating a potential upside of 129.68%. Neuronetics has a consensus target price of $7.00, indicating a potential upside of 428.30%. Given Neuronetics’ higher probable upside, analysts plainly believe Neuronetics is more favorable than Spectral AI.
Volatility and Risk
Spectral AI has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Neuronetics has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.
Summary
Spectral AI beats Neuronetics on 10 of the 14 factors compared between the two stocks.
About Spectral AI
Spectral AI, Inc., an artificial intelligence (AI) company, focuses on developing predictive medical diagnostics in the United States. The company develops medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView System, a predictive analytics platform integrated with the predictive AI-Burn, which combines AI algorithms and multispectral imaging (MSI) imaging for an assessment of wound healing potential and offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention; and DeepView SnapShot M, a handheld, portable, and wireless diagnostic tool, that provides a potential enhanced and expanded use for the government and emergency care, first responders, and potentially home health care professionals. The company is headquartered in Dallas, Texas.
About Neuronetics
Neuronetics, Inc., a commercial stage medical technology company, designs, develops, and markets products for patients with neurohealth disorders in the United States and internationally. The company offers NeuroStar Advanced Therapy System, a non-invasive and non-systemic office-based treatment to treat adult patients with major depressive disorder. Its NeuroStar Advanced Therapy System uses transcranial magnetic stimulation to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The company sells its products through its sales and customer support team to psychiatrists. The company was incorporated in 2001 and is headquartered in Malvern, Pennsylvania.
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