The shares of ReShape Lifesciences Inc. (NASDAQ:RSLS) and The Michaels Companies, Inc. (NASDAQ:MIK) were among the active stocks of the last trading sessions. ReShape Lifesciences Inc. (NASDAQ:RSLS) soared to 0.32% closing at the price of $0.03 whereas the shares of The Michaels Companies, Inc. (NASDAQ:MIK) declined -1.32% with the decrease of -0.22 points closing at the price of $16.46. ReShape Lifesciences Inc. has currently decrease -99.67% in its stock over the period of 6-months while its rival The Michaels Companies, Inc. subtracted -10.01% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of ReShape Lifesciences Inc. (NASDAQ:RSLS) is -41.1% while the ROI of The Michaels Companies, Inc. (NASDAQ:MIK) is 43.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, RSLS’s EBITDA Margin is 0.02 whereas MIK’s is 6.93.
Both the profitability ratios suggest that The Michaels Companies, Inc. (NASDAQ:MIK) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
ReShape Lifesciences Inc. (NASDAQ:RSLS) reported $-4.8/share EPS for the previous quarter where analysts were predicting an EPS to be $-1.79/share Thus lagging the analyst Estimates with a Surprise Factor of -168.2 Percent. While, The Michaels Companies, Inc. (NASDAQ:MIK) reported EPS of $0.15/share in the last quarter. The analysts projected EPS of $0.13/share depicting a Surprise of 15.4 Percent.
Taking a look at Earnings per Share, The Michaels Companies, Inc. tends to be beating the analyst estimates more than ReShape Lifesciences Inc.. so MIK is more profitable than RSLS.
Technical Analysis of ReShape Lifesciences Inc. & The Michaels Companies, Inc.
Moving average convergence divergence (MACD) shows that ReShape Lifesciences Inc. (NASDAQ:RSLS) is on a PRICE RELATIVITY trend While The Michaels Companies, Inc. (NASDAQ:MIK) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the ReShape Lifesciences Inc. was in BEARISH territory and The Michaels Companies, Inc. was in BULLISH territory.
RSLS’s current statistics gauge that the stock candle is NEUTRAL with LOW volatility. While MIK’s candle is BEARISH with MEDIUM.
EPS Growth Rate: RSLS’s 0.24% versus MIK’s 7.45%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of ReShape Lifesciences Inc. (NASDAQ:RSLS) is predicted at 0.24% while The Michaels Companies, Inc. (NASDAQ:MIK) stands at 7.45%. These numbers suggest that MIK is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of RSLS stands at 0.6 while MIK is at 1.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 3 for RSLS and 2.3 for MIK which means RSLS has Hold rating whereas MIK has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for RSLS is $32 which is 99.91% of its current price while MIK has price target of 21.5 which is 23.44% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
RSLS currently has price to earning P/E ratio of 0 whereas MIK has 8.68 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 6.57.
The price to Book P/B for RSLS is 0, Price to Sale is at 0.88 and for MIK these ratios stand at 0 and 0.51.