Reviewing Neuronetics (NASDAQ:STIM) and Cerus (NASDAQ:CERS)

Cerus (NASDAQ:CERS) and Neuronetics (NASDAQ:STIM) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for Cerus and Neuronetics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cerus	0	0	3	0	3.00
Neuronetics	0	1	2	0	2.67

Cerus presently has a consensus target price of $4.00, indicating a potential upside of 164.90%. Neuronetics has a consensus target price of $5.50, indicating a potential upside of 8.48%. Given Cerus’ stronger consensus rating and higher probable upside, analysts clearly believe Cerus is more favorable than Neuronetics.

Volatility and Risk

Cerus has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500. Comparatively, Neuronetics has a beta of 2.07, meaning that its stock price is 107% more volatile than the S&P 500.

Institutional & Insider Ownership

78.4% of Cerus shares are owned by institutional investors. Comparatively, 53.6% of Neuronetics shares are owned by institutional investors. 3.4% of Cerus shares are owned by insiders. Comparatively, 9.8% of Neuronetics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Cerus and Neuronetics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cerus	-11.60%	-40.55%	-11.12%
Neuronetics	-50.09%	-141.24%	-32.77%

Earnings & Valuation

This table compares Cerus and Neuronetics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cerus	$180.27 million	1.56	-$37.49 million	($0.11)	-13.73
Neuronetics	$72.71 million	2.12	-$30.19 million	($1.23)	-4.12

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

Summary

Cerus beats Neuronetics on 9 of the 14 factors compared between the two stocks.

About Cerus

Cerus Corporation operates as a biomedical products company. The company focuses on developing and commercializing the INTERCEPT Blood System to enhance blood safety. Its INTERCEPT Blood System, a proprietary technology for controlling biological replication that is designed to reduce blood-borne pathogens in donated blood components intended for transfusion. The company offers INTERCEPT Blood Systems for platelets and plasma, which is designed to inactivate blood-borne pathogens in platelets and plasma donated for transfusion; INTERCEPT Blood System for red blood cells to inactivate blood-borne pathogens in red blood cells donated for transfusion; and INTERCEPT Blood System for Cryoprecipitation that uses its plasma system to produce pathogen reduced cryoprecipitated fibrinogen complex for the treatment and control of bleeding, including massive hemorrhage associated with fibrinogen deficiency, as well as pathogen reduced plasma, cryoprecipitate reduced. It sells platelet and plasma systems through its direct sales force and distributors in the United States, Europe, the Commonwealth of Independent States, the Middle East, Latin America, and internationally. Cerus Corporation was incorporated in 1991 and is headquartered in Concord, California.

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.