Comparing Paragon 28 (NYSE:FNA) and STRATA Skin Sciences (NASDAQ:SSKN)

STRATA Skin Sciences (NASDAQ:SSKN) and Paragon 28 (NYSE:FNA) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Earnings & Valuation

This table compares STRATA Skin Sciences and Paragon 28″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STRATA Skin Sciences	$32.68 million	0.37	-$10.83 million	($2.66)	-1.08
Paragon 28	$245.00 million	3.54	-$57.53 million	($0.74)	-13.99

STRATA Skin Sciences has higher earnings, but lower revenue than Paragon 28. Paragon 28 is trading at a lower price-to-earnings ratio than STRATA Skin Sciences, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

STRATA Skin Sciences has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Paragon 28 has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for STRATA Skin Sciences and Paragon 28, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STRATA Skin Sciences	0	0	0	0	0.00
Paragon 28	0	0	4	1	3.20

Paragon 28 has a consensus target price of $15.60, suggesting a potential upside of 50.72%. Given Paragon 28’s stronger consensus rating and higher possible upside, analysts clearly believe Paragon 28 is more favorable than STRATA Skin Sciences.

Profitability

This table compares STRATA Skin Sciences and Paragon 28’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STRATA Skin Sciences	-28.72%	-69.33%	-17.55%
Paragon 28	-25.31%	-37.90%	-18.22%

Institutional & Insider Ownership

32.4% of STRATA Skin Sciences shares are held by institutional investors. Comparatively, 63.6% of Paragon 28 shares are held by institutional investors. 39.0% of STRATA Skin Sciences shares are held by company insiders. Comparatively, 15.3% of Paragon 28 shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Paragon 28 beats STRATA Skin Sciences on 11 of the 15 factors compared between the two stocks.

About STRATA Skin Sciences

STRATA Skin Sciences, Inc., a medical technology company, develops, commercializes, and markets products for the treatment of dermatologic conditions in the United States, Europe, the Middle East, Asia, Australia, South Africa, and Central and South America. The company operates in two segments, Dermatology Recurring Procedures and Dermatology Procedures Equipment. The company products include XTRAC and Pharos excimer lasers, and VTRAC lamp systems for the treatment systems that are used for the treatment of psoriasis, vitiligo, and other skin conditions. It also offers TheraClear Acne Therapy System for the treatment of mild to moderate inflammatory, comedonal, and pustular acne. The company was formerly known as MELA Sciences, Inc and changed its name to STRATA Skin Sciences, Inc. in January 2016. STRATA Skin Sciences, Inc. was incorporated in 1989 and is based in Horsham, Pennsylvania.

About Paragon 28

Paragon 28, Inc. develops, distributes, and sells foot and ankle surgical systems in the United States and internationally. It offers plating systems, including gorilla plating systems, such as lisfranc, lapidus, lateral column, calcaneus slide, and naviculocuneiform (NC) fusion plating systems; baby gorilla plate-specific screws, navicular fracture plates, and 5th metatarsal hook plates; and silverback plating systems. The company also provides precision guide technology for various procedures consisting of fusion, a procedure to address bunion deformities that fuses two bones on the big toe; first tarsometatarsal arthrodesis; and metatarsal osteotomy for bunion correction, medial column beaming for charcot foot reconstruction, ankle fusion plating, and NC joint arthrodesis. In addition, it offers monster, mini monster, and joust beaming screw systems for use in bone reconstruction, osteotomy, arthrodesis, joint fusion, ligament fixation, fracture repair, and fracture fixation; APEX 3D total ankle replacement systems; and total talus spacers to replace the talus and bone in the ankle that connects the leg and foot. Further, the company provides forefoot or hallux valgus correction systems, including phantom intramedullary nail systems for the treatment of severe hallux valgus; and various orthobiologics comprising bone wedges, grafts, demineralized bone matrices, bone void fillers, synthetic materials, amniotic products, and a biocompatible collagen matrix, as well as PRESERVE bone graft systems for homologous application. Additionally, it offers soft tissue fixation systems, titanium sprayed polyetheretherketone implants, nitinol staple systems, stabilization systems, and curved instruments. The company serves hospitals and ambulatory surgery centers through a network of sales representatives and stocking distributors. Paragon 28, Inc. was founded in 2010 and is headquartered in Englewood, Colorado.