Critical Contrast: NEXGEL (NASDAQ:NXGL) & NeuroPace (NASDAQ:NPCE)

NEXGEL (NASDAQ:NXGL) and NeuroPace (NASDAQ:NPCE) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Earnings and Valuation

This table compares NEXGEL and NeuroPace”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NEXGEL	$6.73 million	4.60	-$3.16 million	($0.58)	-7.86
NeuroPace	$76.45 million	4.24	-$32.96 million	($1.00)	-10.87

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

Profitability

This table compares NEXGEL and NeuroPace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NEXGEL	-52.60%	-71.19%	-34.79%
NeuroPace	-36.74%	-205.41%	-28.29%

Risk & Volatility

NEXGEL has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, NeuroPace has a beta of 2.05, meaning that its share price is 105% more volatile than the S&P 500.

Institutional & Insider Ownership

2.2% of NEXGEL shares are owned by institutional investors. Comparatively, 78.8% of NeuroPace shares are owned by institutional investors. 24.9% of NEXGEL shares are owned by company insiders. Comparatively, 22.2% of NeuroPace shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for NEXGEL and NeuroPace, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NEXGEL	0	0	0	0	0.00
NeuroPace	0	1	5	0	2.83

NeuroPace has a consensus target price of $15.00, indicating a potential upside of 37.99%. Given NeuroPace’s stronger consensus rating and higher probable upside, analysts clearly believe NeuroPace is more favorable than NEXGEL.

Summary

NeuroPace beats NEXGEL on 8 of the 14 factors compared between the two stocks.

About NEXGEL

NEXGEL, Inc. manufactures high water content, electron beam cross-linked, and aqueous polymer hydrogels and gels. Its products are used for wound care, medical diagnostics, transdermal drug delivery, and cosmetics. The company was formerly known as AquaMed Technologies, Inc. and changed its name to NEXGEL, Inc. in November 2019. The company was incorporated in 2009 and is based in Langhorne, Pennsylvania.

About NeuroPace

NeuroPace, Inc. operates as a medical device company in the United States. The company develops RNS system, a brain-responsive neuromodulation system that delivers personalized, real-time treatment at the seizure source for treating medically refractory focal epilepsy. It also records continuous brain activity data and enables clinicians to monitor patients in person and remotely. Its RNS System includes RNS neurostimulator, cortical strip and depth leads, and Patient Remote Monitor, as well as other implantable and non-implantable accessories. The company sells its products to hospital facilities for initial RNS system implant procedures and for replacement procedures. NeuroPace, Inc. was incorporated in 1997 and is headquartered in Mountain View, California.