Financial Comparison: Tactile Systems Technology (NASDAQ:TCMD) versus AtriCure (NASDAQ:ATRC)

Tactile Systems Technology (NASDAQ:TCMD) and AtriCure (NASDAQ:ATRC) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Tactile Systems Technology and AtriCure, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tactile Systems Technology 0 2 4 0 2.67
AtriCure 0 0 6 0 3.00

Tactile Systems Technology presently has a consensus price target of $78.80, suggesting a potential upside of 38.44%. AtriCure has a consensus price target of $37.00, suggesting a potential upside of 23.99%. Given Tactile Systems Technology’s higher probable upside, equities research analysts plainly believe Tactile Systems Technology is more favorable than AtriCure.

Volatility & Risk

Tactile Systems Technology has a beta of 1.97, indicating that its stock price is 97% more volatile than the S&P 500. Comparatively, AtriCure has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Profitability

This table compares Tactile Systems Technology and AtriCure’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tactile Systems Technology 5.27% 8.17% 6.76%
AtriCure -7.98% -14.35% -9.41%

Valuation and Earnings

This table compares Tactile Systems Technology and AtriCure’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tactile Systems Technology $143.75 million 7.45 $6.62 million $0.34 167.41
AtriCure $201.63 million 5.72 -$21.14 million ($0.94) -31.74

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

Insider & Institutional Ownership

99.7% of Tactile Systems Technology shares are held by institutional investors. Comparatively, 89.3% of AtriCure shares are held by institutional investors. 6.5% of Tactile Systems Technology shares are held by insiders. Comparatively, 8.0% of AtriCure shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Tactile Systems Technology beats AtriCure on 10 of the 14 factors compared between the two stocks.

Tactile Systems Technology Company Profile

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices for the treatment of chronic diseases in the United States. The company offers Flexitouch system, an at-home solution for lymphedema patients; and ACTitouch system, a home-based solution for chronic venous insufficiency patients. It also provides Entré System, a portable pneumatic compression device that is used for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers; and Airwear Gradient Compression Wrap management of venous insufficiency, venous hypertension, venous ulcerations and lymphedema under the trade name Aero-Wrap. The company was founded in 1995 and is headquartered in Minneapolis, Minnesota.

AtriCure Company Profile

AtriCure, Inc. develops, manufactures, and sells devices for the surgical ablation of cardiac tissue and systems to medical centers in the United States and internationally. The company offers Isolator Synergy and Isolator Synergy Access clamps for the treatment of persistent and long-standing persistent atrial fibrillation concomitant to other open-heart surgical procedures; EPi-Sense guided coagulation system used for the coagulation of tissue; and COBRA Fusion surgical ablation system to combine bipolar temperature-controlled radio frequency energy control with monopolar energy. It also provides multifunctional pens that allow surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation and ablate cardiac tissue with the same device; and linear ablation devices, which enable users to make longer linear lines of ablation. In addition, the company offers cryoICE cryoablation system used to ablate cardiac tissue for the treatment of cardiac arrhythmias; AtriClip system used to occlude the left atrial appendage by mechanically clamping the appendage; and CryoICE CRYO2 cryoablation system to apply cryo-energy to targeted intercostal peripheral nerves in the ribcage and temporarily relieve pain. Further, it provides Lumitip dissector to separate tissues to provide access to key anatomical structures that are targeted for ablation; Fusion Magnetic Retriever System that allows access around anatomical structures; and cardiac surgery instruments, which are used during surgical procedures for repair or replacement of certain heart valves. The company sells its products through independent distributors and direct sales personnel. The company was founded in 2000 and is headquartered in Mason, Ohio.

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