Reviewing Pro-Dex (NASDAQ:PDEX) & iRhythm Technologies (NASDAQ:IRTC)

Pro-Dex (NASDAQ:PDEX) and iRhythm Technologies (NASDAQ:IRTC) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Pro-Dex and iRhythm Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pro-Dex	0	0	1	0	3.00
iRhythm Technologies	0	1	10	0	2.91

Pro-Dex presently has a consensus target price of $56.00, indicating a potential upside of 32.54%. iRhythm Technologies has a consensus target price of $133.73, indicating a potential downside of 9.97%. Given Pro-Dex’s stronger consensus rating and higher possible upside, analysts plainly believe Pro-Dex is more favorable than iRhythm Technologies.

Risk and Volatility

Pro-Dex has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500. Comparatively, iRhythm Technologies has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.

Institutional and Insider Ownership

15.3% of Pro-Dex shares are held by institutional investors. 47.5% of Pro-Dex shares are held by insiders. Comparatively, 1.1% of iRhythm Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Pro-Dex and iRhythm Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pro-Dex	$64.12 million	2.15	$2.13 million	$2.80	15.09
iRhythm Technologies	$618.59 million	7.67	-$123.41 million	($3.14)	-47.30

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

Profitability

This table compares Pro-Dex and iRhythm Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pro-Dex	11.06%	21.68%	12.40%
iRhythm Technologies	-19.14%	-118.83%	-11.34%

Summary

Pro-Dex beats iRhythm Technologies on 10 of the 14 factors compared between the two stocks.

About Pro-Dex

Pro-Dex, Inc. designs, develops, manufactures, and sells powered surgical instruments for medical device original equipment manufacturers worldwide. The company offers autoclavable, battery-powered and electric, and multi-function surgical drivers and shavers that are primarily used in the orthopedic, thoracic, and craniomaxillofacial markets. It also provides engineering, quality, and regulatory consulting services; and manufactures and sells rotary air motors to various industries. The company's products are used in hospitals, medical engineering labs, scientific research facilities, and high-tech manufacturing operations. Pro-Dex, Inc. was founded in 1978 and is headquartered in Irvine, California.

About iRhythm Technologies

iRhythm Technologies, Inc., a digital healthcare company, engages in the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services to diagnose arrhythmias in the United States. It offers Zio services, an ambulatory monitoring solution, including long-term and short-term continuous monitoring and mobile cardiac telemetry monitoring services. The company also provides the Zio Monitor System, a prescription-only, remote electrocardiogram (ECG) monitoring system that consists of a patch ECG monitor that records the electric signal from the heart continuously for up to 14 days and the Zio ECG Utilization Software System, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS System; the Zio XT System is the previous generation of the Zio Monitor System and is a prescription-only, remote ECG monitoring system that consists of the Zio XT patch that records the electric signal from the heart continuously for up to 14 days; and the Zio AT system, a prescription-only, remote ECG monitoring system that similarly consists of the Zio AT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the Zio AT patch and the ZEUS System during the patient wear period. It has a development collaboration agreement with Verily Life Sciences LLC and Verity Ireland Limited to develop various next-generation atrial fibrillation screening, detection, or monitoring products. The company was incorporated in 2006 and is headquartered in San Francisco, California.