Contrasting Natera (NTRA) and InVitae (NVTA)

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Natera (NASDAQ: NTRA) and InVitae (NYSE:NVTA) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Insider and Institutional Ownership

69.4% of Natera shares are owned by institutional investors. Comparatively, 69.9% of InVitae shares are owned by institutional investors. 13.2% of Natera shares are owned by insiders. Comparatively, 8.7% of InVitae shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Natera and InVitae’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natera -58.84% -752.93% -66.23%
InVitae -154.96% -127.38% -68.70%

Valuation & Earnings

This table compares Natera and InVitae’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Natera $210.94 million 4.15 -$136.31 million ($2.40) -6.70
InVitae $68.22 million 7.96 -$123.38 million ($2.65) -3.05

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

Risk & Volatility

Natera has a beta of 2.07, suggesting that its stock price is 107% more volatile than the S&P 500. Comparatively, InVitae has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Natera and InVitae, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natera 0 0 5 0 3.00
InVitae 0 0 4 0 3.00

Natera currently has a consensus price target of $14.75, suggesting a potential downside of 8.21%. InVitae has a consensus price target of $11.00, suggesting a potential upside of 36.14%. Given InVitae’s higher probable upside, analysts clearly believe InVitae is more favorable than Natera.

Summary

Natera beats InVitae on 7 of the 13 factors compared between the two stocks.

Natera Company Profile

Natera, Inc., a diagnostics company, provides preconception and prenatal genetic testing services. It primarily offers Panorama, a non-invasive prenatal test that screens for chromosomal abnormalities of a fetus typically with a blood draw from the mother; Vistara, a single-gene mutations screening test to identify single-gene disorder; Horizon carrier screening to determine carrier status for various genetic diseases that could be passed on to the carrier's children; and Spectrum pre-implantation genetic screening and Spectrum pre-implantation genetic diagnosis to analyze chromosomal anomalies or inherited genetic conditions during an in vitro fertilization cycle. The company also provides Anora Products of Conception test to analyze fetal chromosomes to understand the cause of miscarriage; and non-invasive paternity testing products to determine paternity by analyzing the fragments of fetal deoxyribonucleic acid in a pregnant mother's blood and a blood sample from the alleged father. In addition, it offers Constellation, a cloud-based software product that allows laboratory customers to gain access through the cloud to the company's algorithms and bioinformatics in order to validate and launch tests. The company offers products through its direct sales force, as well as through a network of approximately 70 laboratory and distribution partners in the United States and internationally. The company was formerly known as Gene Security Network, Inc. and changed its name to Natera, Inc. in 2012. Natera, Inc. was founded in 2003 and is headquartered in San Carlos, California.

InVitae Company Profile

Invitae Corporation, a genetic information company, processes DNA-containing samples, analyzes information related to patient-specific genetic variation, and generates test reports for clinicians and their patients in the United States, Canada, and internationally. The company's tests include multiple genes associated with hereditary cancer, neurological disorders, cardiovascular disorders, pediatric disorders, metabolic disorders, and other hereditary conditions; proactive health and wellness screening; and preimplantation embryo testing and carrier screening for inherited disorders, prenatal diagnosis, miscarriage analysis, and pediatric developmental disorders. It also operates Patient Insights Networks, a platform for collecting, curating, coordinating, and delivering data from patients and clinicians; and CancerGene Connect, an end-to-end platform that is used for the collection, analysis, and management of patient family history information. Invitae Corporation serves patients, healthcare providers, and biopharma and advocacy partners. The company was formerly known as Locus Development, Inc. and changed its name to Invitae Corporation in 2012. Invitae Corporation was founded in 2010 and is headquartered in San Francisco, California.

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