Critical Analysis: Inari Medical (NASDAQ:NARI) and STRATA Skin Sciences (NASDAQ:SSKN)

Inari Medical (NASDAQ:NARI) and STRATA Skin Sciences (NASDAQ:SSKN) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Inari Medical and STRATA Skin Sciences’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Inari Medical	$493.63 million	6.34	-$1.64 million	($0.41)	-131.29
STRATA Skin Sciences	$33.36 million	0.35	-$10.83 million	($3.30)	-1.01

Inari Medical has higher revenue and earnings than STRATA Skin Sciences. Inari Medical is trading at a lower price-to-earnings ratio than STRATA Skin Sciences, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

91.0% of Inari Medical shares are owned by institutional investors. Comparatively, 32.4% of STRATA Skin Sciences shares are owned by institutional investors. 10.6% of Inari Medical shares are owned by company insiders. Comparatively, 40.4% of STRATA Skin Sciences shares are owned by company 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 Inari Medical and STRATA Skin Sciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Inari Medical	-4.54%	-1.65%	-1.23%
STRATA Skin Sciences	-34.92%	-65.76%	-19.69%

Analyst Ratings

This is a summary of recent recommendations and price targets for Inari Medical and STRATA Skin Sciences, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Inari Medical	0	3	4	0	2.57
STRATA Skin Sciences	0	0	0	0	N/A

Inari Medical presently has a consensus target price of $64.83, suggesting a potential upside of 20.44%. STRATA Skin Sciences has a consensus target price of $38.00, suggesting a potential upside of 1,037.72%. Given STRATA Skin Sciences’ higher possible upside, analysts clearly believe STRATA Skin Sciences is more favorable than Inari Medical.

Volatility & Risk

Inari Medical has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, STRATA Skin Sciences has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500.

Summary

Inari Medical beats STRATA Skin Sciences on 9 of the 13 factors compared between the two stocks.

About Inari Medical

Inari Medical, Inc. builds minimally invasive, novel, and catheter-based mechanical thrombectomy devices and accessories for the specific disease states in the United States. The company provides ClotTriever system, which is designed to core, capture, and remove large clots from large vessels for treatment of deep vein thrombosis and peripheral thrombus; FlowTriever system, a large bore catheter-based aspiration and mechanical thrombectomy system to remove large clots from large vessels in the peripheral vasculature for treating pulmonary embolism and other complex venous thromboembolism cases; InThrill system to treat small vessel thrombosis; and LimFlow system for patients who have chronic limb-threatening ischemia with no suitable endovascular or surgical revascularization options and risk of major amputation. It serves interventional radiologists, interventional cardiologists, and vascular surgeons. The company was formerly known as Inceptus Newco1 Inc. and changed its name to Inari Medical, Inc. in September 2013. Inari Medical, Inc. was incorporated in 2011 and is headquartered in Irvine, California.

About STRATA Skin Sciences

STRATA Skin Sciences, Inc., a medical technology company, develops, commercializes, and markets products for the treatment of dermatologic conditions in the United States, Europe, the Middle East, Asia, Australia, South Africa, and Central and South America. The company operates in two segments, Dermatology Recurring Procedures and Dermatology Procedures Equipment. The company products include XTRAC and Pharos excimer lasers, and VTRAC lamp systems for the treatment systems that are used for the treatment of psoriasis, vitiligo, and other skin conditions. It also offers TheraClear Acne Therapy System for the treatment of mild to moderate inflammatory, comedonal, and pustular acne. The company was formerly known as MELA Sciences, Inc and changed its name to STRATA Skin Sciences, Inc. in January 2016. STRATA Skin Sciences, Inc. was incorporated in 1989 and is based in Horsham, Pennsylvania.