Critical Review: Spectral Medical (OTCMKTS:EDTXF) & Apyx Medical (NASDAQ:APYX)

Spectral Medical (OTCMKTS:EDTXF) and Apyx Medical (NASDAQ:APYX) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Insider and Institutional Ownership

55.3% of Apyx Medical shares are owned by institutional investors. 1.5% of Spectral Medical shares are owned by company insiders. Comparatively, 13.1% of Apyx Medical shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Spectral Medical and Apyx Medical, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectral Medical	0	0	0	0	N/A
Apyx Medical	0	0	2	0	3.00

Apyx Medical has a consensus target price of $6.17, indicating a potential upside of 337.35%. Given Apyx Medical’s higher probable upside, analysts plainly believe Apyx Medical is more favorable than Spectral Medical.

Profitability

This table compares Spectral Medical and Apyx Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectral Medical	-974.16%	N/A	-210.60%
Apyx Medical	-35.75%	-54.90%	-28.41%

Volatility and Risk

Spectral Medical has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Apyx Medical has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Valuation and Earnings

This table compares Spectral Medical and Apyx Medical’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectral Medical	$1.18 million	77.59	-$11.60 million	($0.04)	-8.22
Apyx Medical	$52.35 million	0.93	-$18.71 million	($0.54)	-2.61

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

Summary

Apyx Medical beats Spectral Medical on 9 of the 13 factors compared between the two stocks.

About Spectral Medical

Spectral Medical Inc. focuses on the development and commercialization of products for the treatment of septic shock in the United States, Italy, Ireland, and internationally. The company markets Endotoxin Activity Assay, a rapid in vitro diagnostic test for the detection of components of gram negative bacterial cell wall; and Polymyxin B Hemoperfusion, a therapeutic hemoperfusion device that removes endotoxin from the bloodstream. It also develops and manufactures monoclonal and polyclonal antibodies, recombinant cardiac proteins, and calibrators for use in the research and development, as well as products that are manufactured by other diagnostic companies. The company was formerly known as Spectral Diagnostics Inc. and changed its name to Spectral Medical Inc. in December 2014. Spectral Medical Inc. was incorporated in 1991 and is headquartered in Toronto, Canada.

About Apyx Medical

Apyx Medical Corporation, an energy technology company, develops, manufactures, and sells medical devices in the cosmetic and surgical markets in the United States and internationally. It operates through two segments: Advanced Energy and Original Equipment Manufacturing (OEM). The company offers Helium Plasma Generator for delivery of RF energy and helium plasma to cut, coagulate, and ablate soft tissue during open and minimally invasive surgical procedures. Its Helium Plasma Technology products are marketed and sold as Renuvion in the cosmetic surgery market and J-Plasma in the hospital surgical market. It also develops and manufactures hand pieces for open and laparoscopic procedures; and OEM generators and related accessories. The company was formerly known as Bovie Medical Corporation and changed its name to Apyx Medical Corporation in January 2019. Apyx Medical Corporation was incorporated in 1982 and is based in Clearwater, Florida.