Critical Review: Sientra (SIEN) & NuVasive (NUVA)

NuVasive (NASDAQ: NUVA) and Sientra (NASDAQ:SIEN) are both healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Insider & Institutional Ownership

76.6% of Sientra shares are held by institutional investors. 1.2% of NuVasive shares are held by company insiders. Comparatively, 28.1% of Sientra shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares NuVasive and Sientra’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NuVasive $962.07 million 2.83 $37.14 million $1.19 44.82
Sientra $20.73 million 10.90 -$40.16 million ($2.85) -4.09

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

Profitability

This table compares NuVasive and Sientra’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NuVasive 6.36% 13.65% 6.17%
Sientra -169.77% -68.82% -43.13%

Volatility & Risk

NuVasive has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Sientra has a beta of -1.47, suggesting that its share price is 247% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for NuVasive and Sientra, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NuVasive 0 2 13 0 2.87
Sientra 0 1 4 0 2.80

NuVasive currently has a consensus target price of $71.64, indicating a potential upside of 34.34%. Sientra has a consensus target price of $15.00, indicating a potential upside of 28.76%. Given NuVasive’s stronger consensus rating and higher possible upside, analysts plainly believe NuVasive is more favorable than Sientra.

Summary

NuVasive beats Sientra on 11 of the 14 factors compared between the two stocks.

About NuVasive

Nuvasive, Inc. is a medical device company. The Company focuses on developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine surgery. Its product portfolio focuses on applications for spine fusion surgery, including biologics used to aid in the spinal fusion process. Its principal product offering includes a minimally-disruptive surgical platform called Maximum Access Surgery (MAS). The platform includes its software-driven nerve detection and avoidance systems, including NVM5, and intraoperative monitoring services and support; MaXcess, an integrated split-blade retractor system, and a range of implants and biologics. The platform combines three product categories: its MaXcess retractors, specialized implants and fixation products, and nerve monitoring systems and service offerings that collectively enable surgeons to detect and navigate around nerves, while directing customized access to the spine for implant delivery.

About Sientra

Sientra, Inc. is a medical aesthetics company. The Company’s primary products are silicone gel breast implants for use in breast augmentation and breast reconstruction procedures, which it offers in over 190 variations of shapes, sizes and textures. The Company sells its breast implants and breast tissue expanders, or breast products to plastic surgeons. Its breast implants are primarily used in elective procedures, which are generally performed on a cash-pay basis. TRUE Texture provides texturing on the implant shell that is designed to reduce the incidence of malposition, rotation and capsular contracture. The Company also offers breast tissue expanders and a range of other aesthetic and specialty products. The Company offers a range of HSC+ breast implants, including anatomically shaped textured, round textured and round smooth. The Company also offers miraDry system, the device to reduce underarm sweat, odor and permanently reduce hair of all colors.

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