Invacare Corporation (IVC) versus T2 Biosystems (TTOO) Critical Analysis

Invacare Corporation (NYSE: IVC) and T2 Biosystems (NASDAQ:TTOO) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Volatility and Risk

Invacare Corporation has a beta of 2.36, suggesting that its stock price is 136% more volatile than the S&P 500. Comparatively, T2 Biosystems has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Invacare Corporation and T2 Biosystems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Invacare Corporation 0 1 2 0 2.67
T2 Biosystems 1 2 3 0 2.33

Invacare Corporation currently has a consensus price target of $14.50, indicating a potential downside of 6.75%. T2 Biosystems has a consensus price target of $6.83, indicating a potential upside of 53.56%. Given T2 Biosystems’ higher probable upside, analysts plainly believe T2 Biosystems is more favorable than Invacare Corporation.

Valuation and Earnings

This table compares Invacare Corporation and T2 Biosystems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Invacare Corporation $980.12 million 0.52 -$13.64 million ($1.93) -8.06
T2 Biosystems $3.89 million 35.19 -$49.26 million ($1.96) -2.27

Invacare Corporation has higher revenue and earnings than T2 Biosystems. Invacare Corporation is trading at a lower price-to-earnings ratio than T2 Biosystems, indicating that it is currently the more affordable of the two stocks.

Dividends

Invacare Corporation pays an annual dividend of $0.05 per share and has a dividend yield of 0.3%. T2 Biosystems does not pay a dividend. Invacare Corporation pays out -2.6% of its earnings in the form of a dividend.

Profitability

This table compares Invacare Corporation and T2 Biosystems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Invacare Corporation -6.42% -12.79% -5.88%
T2 Biosystems -1,473.71% -178.83% -71.46%

Institutional & Insider Ownership

60.6% of T2 Biosystems shares are owned by institutional investors. 3.2% of Invacare Corporation shares are owned by company insiders. Comparatively, 38.7% of T2 Biosystems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Invacare Corporation beats T2 Biosystems on 10 of the 15 factors compared between the two stocks.

Invacare Corporation Company Profile

Invacare Corporation is a manufacturer and distributor for medical equipment used in non-acute care settings. The Company’s geographical segments are Europe; North America, which includes North America/Home Medical Equipment (North America/HME) and Institutional Products Group (IPG) segments, and Asia/Pacific. The Company manufactures and distributes three product categories: mobility and seating, lifestyle and respiratory therapy. It provides medical device solutions for congenital (cerebral palsy, muscular dystrophy and spina bifida), acquired (stroke, spinal cord injury, traumatic brain injury, post-acute recovery and pressure ulcers) and degenerative (amyotrophic lateral sclerosis, multiple sclerosis, chronic obstructive pulmonary disease (COPD), elderly and bariatric) ailments. The Company sells its products to home medical equipment providers with retail and e-commerce channels, residential living operators, distributors and government health services.

T2 Biosystems Company Profile

T2 Biosystems, Inc. is an in vitro diagnostics company engaged in developing a technology platform offering an alternative to diagnostic methodologies. The Company’s T2 Magnetic Resonance platform (T2MR) enables detection of pathogens, biomarkers and other abnormalities in a range of unpurified patient sample types, including whole blood, plasma, serum, saliva, sputum and urine, and can detect cellular targets at limits of detection as one colony forming unit per milliliter (CFU/mL). The Company’s initial development efforts target sepsis, hemostasis and Lyme disease. T2MR is a miniaturized, magnetic resonance-based approach that measures how water molecules react in the presence of magnetic fields. Its platform detects a range of targets, including molecular targets, such as deoxyribonucleic acid (DNA), immunodiagnostics, such as proteins, and a range of hemostasis measurements. The Company offers T2Dx Instrument (T2Dx) and the T2Candida Panel.

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