Analyzing Biostage (OTCMKTS:BSTG) & OrthoPediatrics (NASDAQ:KIDS)

Biostage (OTCMKTS:BSTG) and OrthoPediatrics (NASDAQ:KIDS) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Risk & Volatility

Biostage has a beta of -1.02, meaning that its stock price is 202% less volatile than the S&P 500. Comparatively, OrthoPediatrics has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Profitability

This table compares Biostage and OrthoPediatrics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Biostage	N/A	N/A	-174.43%
OrthoPediatrics	-13.58%	-5.12%	-4.41%

Earnings & Valuation

This table compares Biostage and OrthoPediatrics’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Biostage	N/A	N/A	-$6.07 million	($0.58)	-7.67
OrthoPediatrics	$161.83 million	4.82	-$20.97 million	($0.96)	-34.11

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

Insider & Institutional Ownership

69.1% of OrthoPediatrics shares are owned by institutional investors. 15.3% of Biostage shares are owned by insiders. Comparatively, 31.8% of OrthoPediatrics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Biostage and OrthoPediatrics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Biostage	0	0	0	0	N/A
OrthoPediatrics	0	1	3	0	2.75

OrthoPediatrics has a consensus target price of $45.50, indicating a potential upside of 38.93%. Given OrthoPediatrics’ higher possible upside, analysts plainly believe OrthoPediatrics is more favorable than Biostage.

Summary

OrthoPediatrics beats Biostage on 7 of the 12 factors compared between the two stocks.

About Biostage

Biostage, Inc., a biotechnology company, offers products to cure patients of cancers, injuries, and birth defects of the gastro-intestinal tract and the airways. The company's pipeline includes organ-regeneration technology for the repair or replacement of diseased or damaged organs, as well as product candidates to treat cancer, injury, and birth defects of the bronchus. Its lead product candidate is Biostage Esophageal Implant for the treatment of severe esophageal disease. The company was formerly known as Harvard Apparatus Regenerative Technology, Inc. and changed its name to Biostage, Inc. in March 2016. Biostage, Inc. was founded in 2009 and is headquartered in Holliston, Massachusetts.

About OrthoPediatrics

OrthoPediatrics Corp., a medical device company, engages in designing, developing, and marketing anatomically appropriate implants, instruments, and specialized braces for children with orthopedic conditions in the United States and internationally. The company offers pediatric trauma and deformity correction products; scoliosis procedures for the treatment of spinal deformity; and sports medicine and other products. Its products comprise PediLoc, PediPlates, cannulated screws, PediFlex nail, PediNail, PediLoc Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE Spine, BandLoc, Pediguard, Pediatric Nailing Platform | Femur, Devise Rail, Orthex, The Fassier-Duval Telescopic Intramedullary System, SLIMTM Nail, The GAP Nail, The Free Gliding SCFE Screw System, GIROTM Growth Modulation System, PNP Tibia System, ApiFix Mid-C System, and Mitchell Ponseti. The company serves pediatric orthopedic market, as well as pediatric orthopedic surgeons and caregivers. OrthoPediatrics Corp. was founded in 2006 and is headquartered in Warsaw, Indiana.