Psychemedics (PMD) & Guardant Health (NASDAQ:GH) Critical Review

Psychemedics (NASDAQ:PMD) and Guardant Health (NASDAQ:GH) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Profitability

This table compares Psychemedics and Guardant Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Psychemedics 14.24% 26.58% 18.41%
Guardant Health N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Psychemedics and Guardant Health, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Psychemedics 0 0 0 0 N/A
Guardant Health 0 1 4 0 2.80

Guardant Health has a consensus target price of $39.50, indicating a potential downside of 8.01%. Given Guardant Health’s higher probable upside, analysts plainly believe Guardant Health is more favorable than Psychemedics.

Dividends

Psychemedics pays an annual dividend of $0.72 per share and has a dividend yield of 4.2%. Guardant Health does not pay a dividend.

Valuation and Earnings

This table compares Psychemedics and Guardant Health’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Psychemedics $39.70 million 2.36 $6.12 million N/A N/A
Guardant Health N/A N/A N/A N/A N/A

Psychemedics has higher revenue and earnings than Guardant Health.

Institutional & Insider Ownership

56.3% of Psychemedics shares are owned by institutional investors. 9.9% of Psychemedics shares are owned 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.

Summary

Psychemedics beats Guardant Health on 7 of the 9 factors compared between the two stocks.

Psychemedics Company Profile

Psychemedics Corporation provides testing services for the detection of drugs of abuse through the analysis of hair samples in the United States and internationally. The company's tests provide quantitative information that can indicate the approximate amount of drug ingested, as well as historical data, which can show a pattern of individual drug use over a longer period of time. It provides screening and confirmation by mass spectrometry using industry-accepted practices for cocaine, marijuana, PCP, amphetamines, synthetic cannabinoids, and benzodiazepines, as well as opiates, including heroin, hydrocodone, hydromorphone, oxycodone, oxymorphone, and codeine. The company offers its services to employers for applicant and employee testing; treatment professionals, law enforcement agencies, school administrators, and parents concerned about their children's drug use; and Fortune 500 companies and small to mid-size corporations, as well as school and government entities. Psychemedics Corporation was founded in 1985 and is headquartered in Acton, Massachusetts.

Guardant Health Company Profile

Guardant Health, Inc., a precision oncology company, provides non-invasive cancer diagnostics. It offers liquid biopsy tests for advanced stage cancer, such as Guardant360, a molecular diagnostic test that measures various cancer-related genes from circulating tumor DNA (ctDNA); and GuardantOMNI, a broader panel measuring various genes from ctDNA. The company also provides LUNAR-1 for recurrence detection in cancer survivors; and LUNAR-2 for early detection of cancer in higher risk individuals. Guardant Health, Inc. was incorporated in 2011 and is headquartered in Redwood City, California.

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