Critical Analysis: Brainsway (NASDAQ:BWAY) and Evolus (NASDAQ:EOLS)

Brainsway (NASDAQ:BWAY) and Evolus (NASDAQ:EOLS) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Valuation & Earnings

This table compares Brainsway and Evolus”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brainsway	$52.22 million	11.42	$7.57 million	$0.35	42.54
Evolus	$297.18 million	1.42	-$51.64 million	($0.67)	-9.59

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

Risk and Volatility

Brainsway has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Evolus has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Profitability

This table compares Brainsway and Evolus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brainsway	15.68%	12.28%	7.75%
Evolus	-14.39%	N/A	-19.03%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Brainsway and Evolus, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brainsway	0	1	3	0	2.75
Evolus	1	1	4	0	2.50

Brainsway currently has a consensus target price of $15.00, indicating a potential upside of 0.74%. Evolus has a consensus target price of $16.00, indicating a potential upside of 149.03%. Given Evolus’ higher possible upside, analysts clearly believe Evolus is more favorable than Brainsway.

Institutional & Insider Ownership

30.1% of Brainsway shares are owned by institutional investors. Comparatively, 90.7% of Evolus shares are owned by institutional investors. 19.0% of Brainsway shares are owned by insiders. Comparatively, 5.0% of Evolus shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Brainsway beats Evolus on 9 of the 14 factors compared between the two stocks.

About Brainsway

BrainsWay Ltd. develops and sells noninvasive neurostimulation treatments for mental health disorders in the United States and internationally. It offers Deep Transcranial Magnetic Stimulation platform technology for the treatment of major depressive disorders, anxious depression, obsessive-compulsive disorders, smoking addiction, bipolar disorders, post traumatic stress disorders, schizophrenia, Alzheimer's disease, autism, chronic pain, multiple sclerosis, post stroke rehabilitation, and Parkinson's diseases. The company serves doctors, hospitals, and medical centers in the field of psychiatry. BrainsWay Ltd. was founded in 2003 and is headquartered in Jerusalem, Israel.

About Evolus

Evolus, Inc., a performance beauty company, focuses on delivering products in the cash-pay aesthetic market in the United States, Canada, and Europe. The company offers Jeuveau, a proprietary 900 kilodalton purified botulinum toxin type A formulation for the temporary improvement in the appearance of moderate to severe glabellar lines in adults. It also provides dermal filler products under the Estyme and Evolysse names. The company was incorporated in 2012 and is headquartered in Newport Beach, California.