Comparing Novocure (NASDAQ:NVCR) and Inspire Medical Systems (NASDAQ:INSP)

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Novocure (NASDAQ:NVCR) and Inspire Medical Systems (NYSE:INSP) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Novocure and Inspire Medical Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novocure 0 3 3 0 2.50
Inspire Medical Systems 0 2 1 0 2.33

Novocure currently has a consensus price target of $79.40, indicating a potential downside of 0.16%. Inspire Medical Systems has a consensus price target of $68.00, indicating a potential upside of 6.17%. Given Inspire Medical Systems’ higher probable upside, analysts plainly believe Inspire Medical Systems is more favorable than Novocure.

Insider and Institutional Ownership

66.4% of Novocure shares are held by institutional investors. Comparatively, 83.1% of Inspire Medical Systems shares are held by institutional investors. 5.6% of Novocure shares are held by insiders. Comparatively, 12.1% of Inspire Medical Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Novocure and Inspire Medical Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novocure -8.43% -18.45% -6.95%
Inspire Medical Systems -40.36% -18.32% -15.09%

Valuation and Earnings

This table compares Novocure and Inspire Medical Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Novocure $248.07 million 31.73 -$63.56 million ($0.69) -115.26
Inspire Medical Systems $50.59 million 30.47 -$21.83 million ($1.50) -42.70

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

Volatility and Risk

Novocure has a beta of 2.34, indicating that its stock price is 134% more volatile than the S&P 500. Comparatively, Inspire Medical Systems has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Summary

Novocure beats Inspire Medical Systems on 8 of the 14 factors compared between the two stocks.

Novocure Company Profile

Novocure Ltd. is global oncology company, which engages in the development and commercialization of its innovative therapy. It focuses on the commercial adoption of Optune, and its Tumor Treating Fields delivery system, for the treatment of glioblastoma (GBM), and to advance programs testing the efficacy and safety of Optune in multiple solid tumor indications through clinical pipeline. The company was founded by Yoram Palti in 2000 and is headquartered in St. Helier, Jersey.

Inspire Medical Systems Company Profile

Inspire Medical Systems, Inc., a medical technology company, focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea (OSA). It offers Inspire system, a neurostimulation technology that provides a safe and effective treatment for moderate to severe obstructive sleep apnea. The company was founded in 2007 and is headquartered in Maple Grove, Minnesota.

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