Tactile Systems Technology (NASDAQ: TCMD) and Penumbra (NYSE:PEN) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitabiliy, risk, valuation, analyst recommendations, institutional ownership and dividends.
Insider & Institutional Ownership
32.8% of Tactile Systems Technology shares are owned by institutional investors. Comparatively, 69.0% of Penumbra shares are owned by institutional investors. 49.9% of Tactile Systems Technology shares are owned by company insiders. Comparatively, 22.0% of Penumbra shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations for Tactile Systems Technology and Penumbra, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tactile Systems Technology | 0 | 0 | 4 | 0 | 3.00 |
| Penumbra | 0 | 0 | 2 | 0 | 3.00 |
Tactile Systems Technology presently has a consensus price target of $22.67, suggesting a potential downside of 23.29%. Penumbra has a consensus price target of $95.00, suggesting a potential upside of 16.35%. Given Penumbra’s higher possible upside, analysts clearly believe Penumbra is more favorable than Tactile Systems Technology.
Profitability
This table compares Tactile Systems Technology and Penumbra’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tactile Systems Technology | 2.24% | 4.82% | 3.28% |
| Penumbra | -2.31% | -2.25% | -1.96% |
Earnings and Valuation
This table compares Tactile Systems Technology and Penumbra’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Tactile Systems Technology | $90.69 million | 5.52 | $4.01 million | $0.09 | 328.37 |
| Penumbra | $278.61 million | 9.85 | -$2.82 million | ($0.21) | -388.81 |
Tactile Systems Technology has higher revenue, but lower earnings than Penumbra. Penumbra is trading at a lower price-to-earnings ratio than Tactile Systems Technology, indicating that it is currently the more affordable of the two stocks.
Summary
Tactile Systems Technology beats Penumbra on 7 of the 11 factors compared between the two stocks.
About Tactile Systems Technology
Tactile Systems Technology, Inc. is a medical technology company that develops and provides medical devices for the treatment of chronic diseases at home. The Company is a manufacturer and distributor of the Flexitouch and Entre Systems, medical devices that help control symptoms of lymphedema, a chronic and progressive medical condition that is often an unintended consequence of cancer treatment, and the ACTitouch System, a medical device used to treat venous leg ulcers and chronic venous insufficiency. Its products deliver long-term treatment of chronic diseases. The Company provides its products for use in the home and sells them through vascular, wound and lymphedema clinics throughout the United States. The Company offers a platform to deliver at-home healthcare solutions throughout the United States. Its initial area of therapeutic focus is vascular disease, with a focus on advancing the care in treating lymphedema and chronic venous insufficiency.
About Penumbra
Penumbra, Inc. is a healthcare company focused on interventional therapies. The Company designs, develops, manufactures and markets medical devices. It has a portfolio of products that addresses medical conditions and clinical needs across two markets, neuro and peripheral vascular. The conditions that its products address include ischemic stroke, hemorrhagic stroke and various peripheral vascular conditions that can be treated through thrombectomy and embolization procedures. It focuses on developing, manufacturing and marketing products for use by specialist physicians, including interventional neuroradiologists, neurosurgeons, interventional neurologists, interventional radiologists and vascular surgeons. Its neuro products include Neurovascular Access, Neuro Thrombectomy (Ischemic Stroke), Neurovascular Embolization (Brain Aneurysms) and Neurosurgical Tools (Hemorrhagic Stroke). Its peripheral vascular products include Peripheral Vascular Embolization and Peripheral Thrombectomy.
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