Critical Survey: LightPath Technologies (LPTH) vs. TearLab (TEAR)

TearLab (OTCMKTS: TEAR) and LightPath Technologies (NASDAQ:LPTH) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Analyst Ratings

This is a summary of recent ratings for TearLab and LightPath Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TearLab 0 0 4 0 3.00
LightPath Technologies 0 0 1 0 3.00

TearLab presently has a consensus price target of $5.75, suggesting a potential upside of 1,393.51%. LightPath Technologies has a consensus price target of $3.10, suggesting a potential upside of 39.64%. Given TearLab’s higher probable upside, analysts plainly believe TearLab is more favorable than LightPath Technologies.

Volatility and Risk

TearLab has a beta of 2.71, meaning that its share price is 171% more volatile than the S&P 500. Comparatively, LightPath Technologies has a beta of -0.66, meaning that its share price is 166% less volatile than the S&P 500.

Profitability

This table compares TearLab and LightPath Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TearLab -60.22% N/A -75.54%
LightPath Technologies 25.13% 31.44% 19.09%

Insider & Institutional Ownership

9.0% of TearLab shares are held by institutional investors. Comparatively, 31.5% of LightPath Technologies shares are held by institutional investors. 12.0% of TearLab shares are held by company insiders. Comparatively, 12.7% of LightPath Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares TearLab and LightPath Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TearLab $28.01 million 0.11 -$19.92 million ($2.98) -0.13
LightPath Technologies $28.37 million 1.92 $7.70 million $0.31 7.16

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

Summary

LightPath Technologies beats TearLab on 10 of the 13 factors compared between the two stocks.

About TearLab

TearLab Corporation is an in-vitro diagnostic company. The Company has commercialized a tear testing platform, the TearLab Osmolarity System, which enables eye care practitioners to test for sensitive and specific biomarkers using nanoliters of tear film at the point-of-care. The Company, through its subsidiary TearLab Research, Inc., develops technologies to enable eye care practitioners to test a range of biomarkers (chemistries, metabolites, genes and proteins) at the point-of-care. Its product, the TearLab Osmolarity System, enables the measurement of tear osmolarity in the doctor’s office. The TearLab Osmolarity System consists of approximately three components: the TearLab disposable, the TearLab Pen, and the TearLab Reader. The TearLab disposable is a single-use microfluidic microchip. The TearLab Pen is a hand-held device that interfaces with the TearLab disposable. The TearLab Reader is a small desktop unit that allows for the docking of the TearLab Pen.

About LightPath Technologies

LightPath Technologies, Inc. is a manufacturer and integrator of families of precision molded aspheric optics, fiber-optic collimator, GRADIUM glass lenses and other optical materials used to produce products that manipulate light. The Company designs, develops, manufactures and distributes optical components and assemblies utilizing the optical processes and manufacturing technologies. The Company also performs research and development for optical solutions for the traditional optics markets and communications markets. The Company’s products are incorporated into a range of applications by its customers in various industries, including defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors.

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