Critical Contrast: TerrAscend (OTCMKTS:TSNDF) and Owlet (NYSE:OWLT)

Owlet (NYSE:OWLT) and TerrAscend (OTCMKTS:TSNDF) are both small-cap healthcare companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Institutional and Insider Ownership

72.6% of Owlet shares are owned by institutional investors. Comparatively, 5.8% of TerrAscend shares are owned by institutional investors. 36.2% of Owlet shares are owned by insiders. Comparatively, 31.9% of TerrAscend shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Owlet and TerrAscend, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Owlet	1	1	3	0	2.40
TerrAscend	0	1	0	0	2.00

Owlet currently has a consensus price target of $15.00, indicating a potential upside of 256.72%. Given Owlet’s stronger consensus rating and higher possible upside, research analysts clearly believe Owlet is more favorable than TerrAscend.

Risk and Volatility

Owlet has a beta of 1.91, meaning that its share price is 91% more volatile than the S&P 500. Comparatively, TerrAscend has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Valuation & Earnings

This table compares Owlet and TerrAscend”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Owlet	$105.70 million	1.16	-$39.68 million	($0.75)	-5.61
TerrAscend	$260.56 million	0.58	-$81.33 million	($0.11)	-4.43

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

Profitability

This table compares Owlet and TerrAscend’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Owlet	-8.61%	-601.24%	-15.96%
TerrAscend	-31.01%	-32.93%	-5.49%

Summary

Owlet beats TerrAscend on 9 of the 14 factors compared between the two stocks.

About Owlet

Owlet, Inc. provides digital parenting solutions in the United States and internationally. The company's platform focuses on giving real-time data and insights to parents. It offers Dream Sock, a wearable infant health monitor equipped with pulse oximetry technology to track vitals signs, such as pulse rate, oxygen, activity, and sleep patterns; BabySat which is intended for infants with heightened health risk; Owlet Cam, a monitoring device in smartphones that offers video and audio, predictive sleep insights, and cry detections; and accessories, including Owlet Sleeper, as well as Duo and Dream Duo that combines Smart Sock with the Owlet Cam. The company was founded in 2012 and is headquartered in Lehi, Utah.

About TerrAscend

TerrAscend Corp. cultivates, processes, and sells medical and adult use cannabis in Canada and the United States. The company produces and distributes hemp-derived wellness products to retail locations; and manufactures vaporizables, concentrates, topicals, tinctures and edibles. It also operates retail dispensaries under the Apothecarium and State Flower brand names. The company was incorporated in 2017 and is headquartered in Mississauga, Canada.