Head to Head Review: DexCom (NASDAQ:DXCM) and Avanos Medical (NYSE:AVNS)
by Mitch Edgeman · The Markets DailyAvanos Medical (NYSE:AVNS – Get Free Report) and DexCom (NASDAQ:DXCM – Get Free Report) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Earnings and Valuation
This table compares Avanos Medical and DexCom”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Avanos Medical | $687.80 million | 0.77 | -$392.10 million | ($10.19) | -1.12 |
| DexCom | $4.03 billion | 6.53 | $576.20 million | $1.80 | 37.54 |
DexCom has higher revenue and earnings than Avanos Medical. Avanos Medical is trading at a lower price-to-earnings ratio than DexCom, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Avanos Medical and DexCom’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Avanos Medical | -67.00% | 6.21% | 4.58% |
| DexCom | 15.96% | 30.65% | 10.56% |
Insider & Institutional Ownership
95.2% of Avanos Medical shares are held by institutional investors. Comparatively, 97.8% of DexCom shares are held by institutional investors. 2.6% of Avanos Medical shares are held by insiders. Comparatively, 0.3% of DexCom shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Volatility & Risk
Avanos Medical has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, DexCom has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Avanos Medical and DexCom, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Avanos Medical | 2 | 0 | 0 | 0 | 1.00 |
| DexCom | 1 | 5 | 19 | 3 | 2.86 |
DexCom has a consensus target price of $86.61, indicating a potential upside of 28.18%. Given DexCom’s stronger consensus rating and higher possible upside, analysts clearly believe DexCom is more favorable than Avanos Medical.
Summary
DexCom beats Avanos Medical on 14 of the 15 factors compared between the two stocks.
About Avanos Medical
Avanos Medical, Inc., a medical technology company, offers medical device solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It offers a portfolio of chronic care products that include digestive health products, such as Mic-Key enteral feeding tubes, Corpak patient feeding solutions, and NeoMed neonatal and pediatric feeding solutions. The company also provides a portfolio of non-opioid pain solutions, including surgical pain and recovery products, such as ON-Q and ambIT surgical pain pumps, Game Ready cold, and compression therapy systems. In addition, it offers interventional pain solutions, which offers minimally invasive pain-relieving therapies, such as Coolief pain relief therapy; OrthogenRx's knee osteoarthritis hyaluronic acid pain relief injection products; and Trident radiofrequency ablation products to treat chronic pain conditions. It markets its products directly to hospitals and other healthcare providers, healthcare facilities, and other end-user customers, as well as through third-party wholesale distributors. The company was formerly known as Halyard Health, Inc. and changed its name to Avanos Medical, Inc. in June 2018. Avanos Medical, Inc. was incorporated in 2014 and is headquartered in Alpharetta, Georgia.
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.