Comparing Treace Medical Concepts (NASDAQ:TMCI) and Precision Optics (NASDAQ:POCI)

Treace Medical Concepts (NASDAQ:TMCI) and Precision Optics (NASDAQ:POCI) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

84.1% of Treace Medical Concepts shares are owned by institutional investors. Comparatively, 13.7% of Precision Optics shares are owned by institutional investors. 23.4% of Treace Medical Concepts shares are owned by insiders. Comparatively, 14.4% of Precision Optics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Treace Medical Concepts has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Precision Optics has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Earnings and Valuation

This table compares Treace Medical Concepts and Precision Optics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Treace Medical Concepts	$212.69 million	1.28	-$59.00 million	($0.97)	-4.34
Precision Optics	$19.09 million	2.90	-$5.78 million	($0.63)	-8.03

Precision Optics has lower revenue, but higher earnings than Treace Medical Concepts. Precision Optics is trading at a lower price-to-earnings ratio than Treace Medical Concepts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Treace Medical Concepts and Precision Optics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Treace Medical Concepts	-29.44%	-67.04%	-30.28%
Precision Optics	-17.03%	-37.47%	-19.96%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Treace Medical Concepts and Precision Optics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Treace Medical Concepts	2	4	1	0	1.86
Precision Optics	1	0	0	0	1.00

Treace Medical Concepts currently has a consensus price target of $4.77, suggesting a potential upside of 13.30%. Given Treace Medical Concepts’ stronger consensus rating and higher probable upside, research analysts clearly believe Treace Medical Concepts is more favorable than Precision Optics.

Summary

Treace Medical Concepts beats Precision Optics on 8 of the 14 factors compared between the two stocks.

About Treace Medical Concepts

Treace Medical Concepts, Inc., a medical technology company, designs, manufactures, and markets medical devices in the United States. The company offers Lapiplasty 3D bunion correction system that combines instruments, implants, and surgical methods designed to surgically correct three planes of the bunion deformity. It also provides Lapiplasty mini-incision system designed to allow the Lapiplasty procedure to be performed through a 3.5cm incision. In addition, the company offers Adductoplasty system designed for reproducible realignment, stabilization, and fusion of the midfoot. Treace Medical Concepts, Inc. was founded in 2013 and is headquartered in Ponte Vedra, Florida.

About Precision Optics

Precision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. It offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians. The company also provides components and assemblies for industrial and military use. It markets its products to medical device companies. The company was incorporated in 1982 and is based in Gardner, Massachusetts.