The shares of NxStage Medical, Inc. (NASDAQ:NXTM) and EQT Midstream Partners, LP (NYSE:EQM) were among the active stocks of the last trading sessions. NxStage Medical, Inc. (NASDAQ:NXTM) soared to 1.37% closing at the price of $28.8 whereas the shares of EQT Midstream Partners, LP (NYSE:EQM) declined -2.29% with the decrease of -1.03 points closing at the price of $43.89. NxStage Medical, Inc. has currently increase 11.46% in its stock over the period of 6-months while its rival EQT Midstream Partners, LP subtracted -14.59% 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 NxStage Medical, Inc. (NASDAQ:NXTM) is 17.3% while the ROI of EQT Midstream Partners, LP (NYSE:EQM) is 7.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NXTM’s EBITDA Margin is 115.03 whereas EQM’s is 8.65.
Both the profitability ratios suggest that NxStage Medical, Inc. (NASDAQ:NXTM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
NxStage Medical, Inc. (NASDAQ:NXTM) reported $-0.04/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.02/share Thus lagging the analyst Estimates with a Surprise Factor of -100 Percent. While, EQT Midstream Partners, LP (NYSE:EQM) reported EPS of $1.14/share in the last quarter. The analysts projected EPS of $1.22/share depicting a Surprise of -6.6 Percent.
Taking a look at Earnings per Share, EQT Midstream Partners, LP tends to be beating the analyst estimates more than NxStage Medical, Inc.. so EQM is more profitable than NXTM.
Technical Analysis of NxStage Medical, Inc. & EQT Midstream Partners, LP
Moving average convergence divergence (MACD) shows that NxStage Medical, Inc. (NASDAQ:NXTM) is on a PRICE RELATIVITY trend While EQT Midstream Partners, LP (NYSE:EQM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the NxStage Medical, Inc. was in BULLISH territory and EQT Midstream Partners, LP was in BEARISH territory.
NXTM’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While EQM’s candle is BEARISH with MEDIUM.
EPS Growth Rate: NXTM’s 20% versus EQM’s 8.5%
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 NxStage Medical, Inc. (NASDAQ:NXTM) is predicted at 20% while EQT Midstream Partners, LP (NYSE:EQM) stands at 8.5%. These numbers suggest that NXTM 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 NXTM stands at 3.4 while EQM is at 0.3 whereas the debt ratio of the prior is 0.06 while the debt ratio of the later is 0.
The values of the both ratios suggest that NXTM is more suitable investment when the liquidity and risk is the main concern.
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 NXTM and 2.1 for EQM which means NXTM has Hold rating whereas EQM 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 NXTM is $30 which is 4% of its current price while EQM has price target of 60.27 which is 27.18% 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.
NXTM currently has price to earning P/E ratio of 50.53 whereas EQM has 9.6 while the forward P/E ratio for the prior stands at 505.26 and for the later it depicts the value of 9.37.
The price to Book P/B for NXTM is 8.67, Price to Sale is at 4.55 and for EQM these ratios stand at 0.98 and 3.94.