Critical Comparison: STRATA Skin Sciences (NASDAQ:SSKN) & ResMed (NYSE:RMD)

ResMed (NYSE:RMD) and STRATA Skin Sciences (NASDAQ:SSKN) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Volatility & Risk

ResMed has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, STRATA Skin Sciences has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for ResMed and STRATA Skin Sciences, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ResMed	0	5	6	0	2.55
STRATA Skin Sciences	0	0	0	0	N/A

ResMed presently has a consensus target price of $202.80, suggesting a potential upside of 11.21%. STRATA Skin Sciences has a consensus target price of $38.00, suggesting a potential upside of 1,117.95%. Given STRATA Skin Sciences’ higher possible upside, analysts plainly believe STRATA Skin Sciences is more favorable than ResMed.

Valuation & Earnings

This table compares ResMed and STRATA Skin Sciences’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ResMed	$4.22 billion	6.45	$897.56 million	$6.51	28.49
STRATA Skin Sciences	$33.36 million	0.33	-$10.83 million	($3.30)	-0.95

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

Profitability

This table compares ResMed and STRATA Skin Sciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ResMed	20.91%	24.43%	15.70%
STRATA Skin Sciences	-34.92%	-65.76%	-19.69%

Insider and Institutional Ownership

55.0% of ResMed shares are owned by institutional investors. Comparatively, 32.4% of STRATA Skin Sciences shares are owned by institutional investors. 1.2% of ResMed 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 large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

ResMed beats STRATA Skin Sciences on 9 of the 12 factors compared between the two stocks.

About ResMed

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. It operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME) to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal. It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies; and MEDIFOX DAN's software solutions. The company markets its products to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force. The company was founded in 1989 and is headquartered in San Diego, 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.