Critical Review: Novocure (NASDAQ:NVCR) and Iradimed (IRMD)

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Novocure (NASDAQ:NVCR) and Iradimed (NASDAQ:IRMD) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Novocure $177.03 million 23.70 -$61.66 million ($0.70) -64.53
Iradimed $23.08 million 13.17 $490,000.00 $0.08 355.88

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

Volatility & Risk

Novocure has a beta of 3.29, indicating that its stock price is 229% more volatile than the S&P 500. Comparatively, Iradimed has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Insider and Institutional Ownership

56.1% of Novocure shares are held by institutional investors. Comparatively, 19.9% of Iradimed shares are held by institutional investors. 15.3% of Novocure shares are held by insiders. Comparatively, 61.2% of Iradimed shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Novocure and Iradimed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novocure -26.99% -52.34% -20.57%
Iradimed 9.57% 8.99% 7.61%

Analyst Recommendations

This is a breakdown of recent recommendations for Novocure and Iradimed, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novocure 0 1 5 0 2.83
Iradimed 0 0 2 0 3.00

Novocure currently has a consensus target price of $48.33, suggesting a potential upside of 7.00%. Iradimed has a consensus target price of $27.00, suggesting a potential downside of 5.16%. Given Novocure’s higher possible upside, equities analysts clearly believe Novocure is more favorable than Iradimed.

Summary

Iradimed beats Novocure on 8 of the 14 factors compared between the two stocks.

About Novocure

NovoCure Limited is a commercial-stage oncology company. The Company is engaged in developing a cancer treatment centered on a therapy called TTFields, the use of electric fields tuned to specific frequencies to disrupt solid tumor cancer cell division. Its TTFields delivery system is used for the treatment of glioblastoma (GBM) and to advance programs testing of TTFields in multiple solid tumor indications through its clinical pipeline. In addition to its clinical and commercial progress in GBM, it is planning or conducting clinical trials evaluating the use of TTFields in brain metastases, non-small-cell lung cancer (NSCLC), pancreatic cancer, ovarian cancer and mesothelioma. TTFields are delivered through a portable, medical device. The complete delivery system, which is designed to allow patients to go about their daily activities while receiving continuous cancer treatment, includes a portable electric field generator, transducer arrays, rechargeable batteries and accessories.

About Iradimed

IRadimed Corporation develops, manufactures, markets, and distributes magnetic resonance imaging (MRI) compatible medical devices, and related accessories and services in the United States and internationally. It offers MRI compatible intravenous (IV) infusion pump system with associated disposable IV tubing sets under the MRidium name; and MRI compatible patient vital signs monitoring system under the IRadimed name. The company also offers IV poles, wireless remote displays/controls, side car pump modules, dose error reduction systems, and SpO2 monitoring with sensors and accessories. It serves hospitals, acute care facilities, and outpatient imaging centers. The company sells its MRI compatible products through direct sales force and independent distributors. IRadimed Corporation was incorporated in 1992 and is headquartered in Winter Springs, Florida.

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