Tenon Medical (NASDAQ:TNON) & ResMed (NYSE:RMD) Financial Analysis

Tenon Medical (NASDAQ:TNON) and ResMed (NYSE:RMD) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Tenon Medical and ResMed, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tenon Medical	0	0	1	0	3.00
ResMed	0	5	6	0	2.55

Tenon Medical currently has a consensus target price of $3.00, indicating a potential upside of 587.92%. ResMed has a consensus target price of $204.70, indicating a potential downside of 10.12%. Given Tenon Medical’s stronger consensus rating and higher probable upside, analysts plainly believe Tenon Medical is more favorable than ResMed.

Volatility and Risk

Tenon Medical has a beta of 2.17, meaning that its stock price is 117% more volatile than the S&P 500. Comparatively, ResMed has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Earnings & Valuation

This table compares Tenon Medical and ResMed’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tenon Medical	$2.93 million	0.59	-$15.58 million	($6.69)	-0.07
ResMed	$4.69 billion	7.14	$1.02 billion	$6.51	34.98

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

Profitability

This table compares Tenon Medical and ResMed’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tenon Medical	-411.27%	-1,149.60%	-191.87%
ResMed	21.79%	25.00%	16.67%

Institutional & Insider Ownership

22.7% of Tenon Medical shares are held by institutional investors. Comparatively, 55.0% of ResMed shares are held by institutional investors. 4.7% of Tenon Medical shares are held by insiders. Comparatively, 1.2% of ResMed shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

ResMed beats Tenon Medical on 10 of the 14 factors compared between the two stocks.

About Tenon Medical

Tenon Medical, Inc., a medical device company, engages in the development of surgical implant systems to treat severe lower back pain in the United States and Puerto Rico. The company offers CATAMARAN SI-Joint Fusion System to fuse sacroiliac joints (SI-Joints) to treat SI-Joint dysfunction that often causes severe lower back pain; and features fixation device that passes through the axial and sagittal planes of the ilium and sacrum, as well as transfixes the SI joints. Tenon Medical, Inc. was incorporated in 2012 and is headquartered in Los Gatos, California.

About ResMed

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. It operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME) to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal. It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies; and MEDIFOX DAN's software solutions. The company markets its products to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force. The company was founded in 1989 and is headquartered in San Diego, California.