Health Catalyst (NASDAQ:HCAT) & Outset Medical (NASDAQ:OM) Critical Analysis
by Amy Steele · The Cerbat GemOutset Medical (NASDAQ:OM – Get Free Report) and Health Catalyst (NASDAQ:HCAT – Get Free Report) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.
Insider & Institutional Ownership
85.0% of Health Catalyst shares are owned by institutional investors. 2.4% of Outset Medical shares are owned by company insiders. Comparatively, 2.6% of Health Catalyst shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of recent ratings and target prices for Outset Medical and Health Catalyst, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Outset Medical | 1 | 1 | 2 | 1 | 2.60 |
| Health Catalyst | 1 | 8 | 5 | 0 | 2.29 |
Outset Medical currently has a consensus price target of $12.67, indicating a potential upside of 235.99%. Health Catalyst has a consensus price target of $4.36, indicating a potential upside of 82.58%. Given Outset Medical’s stronger consensus rating and higher possible upside, analysts plainly believe Outset Medical is more favorable than Health Catalyst.
Profitability
This table compares Outset Medical and Health Catalyst’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Outset Medical | -73.12% | -71.37% | -30.11% |
| Health Catalyst | -34.05% | -6.67% | -3.21% |
Volatility and Risk
Outset Medical has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500. Comparatively, Health Catalyst has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500.
Valuation and Earnings
This table compares Outset Medical and Health Catalyst”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Outset Medical | $113.69 million | 0.60 | -$127.98 million | ($13.05) | -0.29 |
| Health Catalyst | $306.58 million | 0.55 | -$69.50 million | ($1.59) | -1.50 |
Health Catalyst has higher revenue and earnings than Outset Medical. Health Catalyst is trading at a lower price-to-earnings ratio than Outset Medical, indicating that it is currently the more affordable of the two stocks.
Summary
Health Catalyst beats Outset Medical on 9 of the 15 factors compared between the two stocks.
About Outset Medical
Outset Medical, Inc., a medical technology company, engages in the development of a hemodialysis system for hemodialysis in the United States. The company offers Tablo Hemodialysis System, a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings; and manufactures, supports, and distributes for Tablo console, Tablo cartridge, and other consumables. It also provides Tablo Data Ecosystem, including TabloHub, a customer-facing portal; MyTablo, a patient-facing portal; and TabloDash, an internal data analytics platform. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.
About Health Catalyst
Health Catalyst, Inc. provides data and analytics technology and services to healthcare organizations in the United States. It operates in two segments, Technology and Professional Services. The company provides data operating system data platform which provides clients single comprehensive environment to integrate and organize data from their disparate software systems; and analytics applications, a software analytics applications build for data platform to analyze clients face across clinical and quality, population health, and financial and operational use cases. It offers services expertise solutions comprising data and analytics, domain expertise and education, tech-enabled managed, and implementation services; and opportunity analysis and prioritization, data governance, data modeling and analysis, quality and process improvement strategy, cost accounting, data abstraction, and population health strategies. The company was formerly known as HQC Holdings, Inc. and changed its name to Health Catalyst, Inc. in March 2017. Health Catalyst, Inc. was founded in 2008 and is headquartered in South Jordan, Utah.