Head to Head Analysis: American Renal Associates (ARA) & Cancer Genetics (CGIX)

American Renal Associates (NYSE: ARA) and Cancer Genetics (NASDAQ:CGIX) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for American Renal Associates and Cancer Genetics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Renal Associates 0 0 4 0 3.00
Cancer Genetics 0 1 3 0 2.75

American Renal Associates presently has a consensus target price of $20.00, suggesting a potential upside of 5.21%. Cancer Genetics has a consensus target price of $6.00, suggesting a potential upside of 233.33%. Given Cancer Genetics’ higher probable upside, analysts plainly believe Cancer Genetics is more favorable than American Renal Associates.

Volatility and Risk

American Renal Associates has a beta of 3.55, suggesting that its share price is 255% more volatile than the S&P 500. Comparatively, Cancer Genetics has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Valuation and Earnings

This table compares American Renal Associates and Cancer Genetics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Renal Associates $749.77 million 0.80 -$380,000.00 ($0.33) -57.60
Cancer Genetics $27.05 million 1.84 -$15.80 million ($0.82) -2.20

American Renal Associates has higher revenue and earnings than Cancer Genetics. American Renal Associates is trading at a lower price-to-earnings ratio than Cancer Genetics, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

93.7% of American Renal Associates shares are owned by institutional investors. Comparatively, 11.6% of Cancer Genetics shares are owned by institutional investors. 12.6% of American Renal Associates shares are owned by company insiders. Comparatively, 21.3% of Cancer Genetics shares are owned 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.

Profitability

This table compares American Renal Associates and Cancer Genetics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Renal Associates -2.15% 15.80% 2.34%
Cancer Genetics -54.65% -46.21% -24.62%

Summary

American Renal Associates beats Cancer Genetics on 10 of the 14 factors compared between the two stocks.

American Renal Associates Company Profile

American Renal Associates Holdings, Inc. is a dialysis service provider in the United States focused on joint venture (JV) partnerships with physicians. As of December 31, 2016, the Company owned and operated 214 dialysis clinics in partnership with 379 nephrologist partners treating over 14,000 patients in 25 states and the District of Columbia. The Company operates its dialysis clinics exclusively through a JV model, in which it partners primarily with local nephrologists to develop, own and operate dialysis clinics, while the providers of the majority of dialysis services in the United States operate through a combination of subsidiaries and joint ventures. It provides patient care and clinical outcomes to patients suffering from end-stage renal disease (ESRD). Its clinics offer both in center and home dialysis options to meet the needs of patients. Its clinics primarily provide in center hemodialysis treatments and ancillary items and services.

Cancer Genetics Company Profile

Cancer Genetics, Inc. is a United States-based company, which is engaged in the field of personalized medicine. The Company offers diagnostic products and services that enable precision medicine in the field of oncology through molecular markers and diagnostics. The Company offers a range of laboratory services that provide genomic and biomarker information. Its Select One Clinical Trials program provides a range of integrated and dynamic clinical trial services for both oncology and non-oncology genetic testing for Phase I-III trials along with ancillary services, including bioinformatics, biorepository and trials logistic support. The Company is developing a global footprint with locations in the United States, India and China. It also offers a portfolio of genotyping services, with access to over 400 validated genotyping assays, including Phase I and Phase II drug metabolizing enzymes, transporters, and receptors, and over 30 validated gene expression assays.

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