Precision Optics (OTCMKTS:PEYE) & AxoGen (OTCMKTS:AXGN) Critical Analysis

Precision Optics (OTCMKTS:PEYE) and AxoGen (NASDAQ:AXGN) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Risk and Volatility

Precision Optics has a beta of 2, suggesting that its stock price is 100% more volatile than the S&P 500. Comparatively, AxoGen has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500.

Insider & Institutional Ownership

87.5% of AxoGen shares are owned by institutional investors. 24.7% of Precision Optics shares are owned by insiders. Comparatively, 6.8% of AxoGen shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Precision Optics and AxoGen’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Precision Optics $4.04 million 5.30 -$350,000.00 N/A N/A
AxoGen $83.94 million 7.17 -$22.40 million ($0.54) -28.37

Precision Optics has higher earnings, but lower revenue than AxoGen.

Profitability

This table compares Precision Optics and AxoGen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Precision Optics -8.31% -2.05% -1.01%
AxoGen -26.91% -16.73% -15.06%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Precision Optics and AxoGen, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Precision Optics 0 0 0 0 N/A
AxoGen 0 1 5 0 2.83

AxoGen has a consensus target price of $31.00, suggesting a potential upside of 102.35%. Given AxoGen’s higher possible upside, analysts plainly believe AxoGen is more favorable than Precision Optics.

Summary

Precision Optics beats AxoGen on 6 of the 11 factors compared between the two stocks.

Precision Optics Company Profile

Precision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. The company offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians. It also provides components and assemblies, which are designed for industrial and military use. The company markets its products to original equipment manufacturers through medical device companies. Precision Optics Corporation, Inc. has collaboration with OmniVision Technologies, Inc. to develop optical solutions based on an image sensor integrated with its lenses. The company was founded in 1982 and is based in Gardner, Massachusetts.

AxoGen Company Profile

AxoGen, Inc. develops and markets surgical solutions for peripheral nerve injuries. The company's surgical solutions include Avance Nerve Graft, an off-the-shelf processed human nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site; AxoGuard Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves; and AxoGuard Nerve Protector, a porcine submucosa ECM product that is used to wrap and protect damaged peripheral nerves, as well as reinforces the nerve reconstruction while preventing soft tissue attachments. Its solutions also comprise Avive Soft Tissue Membrane, a minimally processed human umbilical cord membrane that can be used as a resorbable soft tissue covering to separate tissues and modulate inflammation in the surgical bed. In addition, the company offers AcroVal neurosensory and motor testing system, which consists of AcroGrip for use in hand grip strength measurement; AcroPinch for measuring pinch strength; and Pressure-Specified Sensory Device, a somatosensory evaluation and measurement device. Further, it provides AxoTouch two point discriminator, a tool that is used for measuring the innervation density of surface area of the skin. The company provides its products to hospitals, surgery centers, and military hospitals in the United States, Canada, the United Kingdom and other European countries, and internationally. AxoGen, Inc. is headquartered in Alachua, Florida.

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