Critical Survey: SurModics (SRDX) and Amedica (AMDA)

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

Profitability

This table compares SurModics and Amedica’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SurModics -2.94% 7.53% 5.63%
Amedica -139.55% -148.64% -67.84%

Institutional and Insider Ownership

85.3% of SurModics shares are owned by institutional investors. Comparatively, 10.0% of Amedica shares are owned by institutional investors. 7.7% of SurModics shares are owned by company insiders. Comparatively, 0.9% of Amedica shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

SurModics has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Amedica has a beta of -1.35, meaning that its share price is 235% less volatile than the S&P 500.

Valuation & Earnings

This table compares SurModics and Amedica’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SurModics $73.11 million 13.80 $3.92 million $0.51 148.14
Amedica $11.22 million 0.43 -$9.32 million N/A N/A

SurModics has higher revenue and earnings than Amedica.

Analyst Recommendations

This is a summary of current ratings for SurModics and Amedica, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SurModics 0 0 4 0 3.00
Amedica 0 2 0 0 2.00

SurModics presently has a consensus target price of $80.33, suggesting a potential upside of 6.33%. Given SurModics’ stronger consensus rating and higher possible upside, analysts clearly believe SurModics is more favorable than Amedica.

Summary

SurModics beats Amedica on 12 of the 12 factors compared between the two stocks.

SurModics Company Profile

Surmodics, Inc., together with its subsidiaries, provides medical devices and in vitro diagnostic technologies to the healthcare industry in the United States and Ireland. It operates through two segments, Medical Device and In Vitro Diagnostics. The Medical Device segment offers surface modification coating technologies to enhance access, deliverability, and predictable deployment of medical devices, as well as drug delivery coating technologies to provide site-specific drug delivery from the surface of a medical device for the coronary, peripheral, neuro-vascular, urology, and other markets. The Vitro Diagnostics segment provides stabilization products, substrates, antigens, and surface coatings to diagnostics customers; and manufactures or sells components for in vitro diagnostic immunoassay and molecular tests, as well as surface coatings to the diagnostic, biomedical research, and life science markets. SurModics, Inc. was founded in 1979 and is headquartered in Eden Prairie, Minnesota.

Amedica Company Profile

Amedica Corporation, a biomaterial company, develops, manufactures, and commercializes a range of medical devices based on its silicon nitride technology platform in the United States, Europe, and South America. The company offers silicon nitride implants to surgeons and hospitals for use in cervical and thoracolumbar spine surgery under the Valeo brand. It also provides a line of non-silicon nitride spinal fixation products to address spinal deformity and degenerative conditions. The company markets and sells its products directly; and through a network of independent sales distributors, as well original equipment manufacturer and private label partnerships. Amedica Corporation was founded in 1996 and is headquartered in Salt Lake City, Utah.

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