Analyzing Tactile Systems Technology (NASDAQ:TCMD) & DexCom (NASDAQ:DXCM)

Tactile Systems Technology (NASDAQ:TCMD) and DexCom (NASDAQ:DXCM) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

83.4% of Tactile Systems Technology shares are owned by institutional investors. Comparatively, 97.8% of DexCom shares are owned by institutional investors. 1.0% of Tactile Systems Technology shares are owned by insiders. Comparatively, 0.3% of DexCom shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Tactile Systems Technology and DexCom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tactile Systems Technology	5.42%	9.24%	6.56%
DexCom	17.22%	31.40%	10.58%

Volatility and Risk

Tactile Systems Technology has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, DexCom has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Tactile Systems Technology and DexCom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tactile Systems Technology	0	2	0	1	2.67
DexCom	0	3	13	2	2.94

Tactile Systems Technology presently has a consensus price target of $23.00, indicating a potential upside of 36.74%. DexCom has a consensus price target of $98.41, indicating a potential upside of 17.34%. Given Tactile Systems Technology’s higher probable upside, equities analysts plainly believe Tactile Systems Technology is more favorable than DexCom.

Valuation & Earnings

This table compares Tactile Systems Technology and DexCom”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tactile Systems Technology	$274.42 million	1.47	$28.51 million	$0.65	25.88
DexCom	$3.62 billion	9.04	$541.50 million	$1.67	50.22

DexCom has higher revenue and earnings than Tactile Systems Technology. Tactile Systems Technology is trading at a lower price-to-earnings ratio than DexCom, indicating that it is currently the more affordable of the two stocks.

Summary

DexCom beats Tactile Systems Technology on 12 of the 15 factors compared between the two stocks.

About Tactile Systems Technology

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices to treat underserved chronic diseases in the United States. It offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema in the home setting; and Entre Plus System, a portable pneumatic compression device for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers. The company also provides Kylee, a mobile application to help patients learn about lymphedema, track their symptoms, and treatment, as well as to share their progress with their doctor; and AffloVest, a portable high frequency chest wall oscillation vest to treat patients with retained pulmonary secretions resulting from bronchiectasis, cystic fibrosis, and various neuromuscular disorders. Tactile Systems Technology, Inc. was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.

About DexCom

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include Dexcom G6 and Dexcom G7, integrated CGM systems for diabetes management; Dexcom Share, a remote monitoring system; Dexcom Real-Time API, which enables authorized third-party software developers to integrate real-time CGM data into their digital health apps and devices; and Dexcom ONE, that is designed to replace finger stick blood glucose testing for diabetes treatment decisions. It has also submitted FDA review for Dexcom Stelo for people with type 2 diabetes. The company has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop blood-based or interstitial glucose monitoring products. It markets its products directly to endocrinologists, physicians, and diabetes educators. The company was incorporated in 1999 and is headquartered in San Diego, California.