KemPharm (NASDAQ: KMPH) and Ardelyx (NASDAQ:ARDX) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.
Valuation and Earnings
This table compares KemPharm and Ardelyx’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ardelyx||$24.03 million||13.05||-$112.38 million||($2.23)||-2.96|
KemPharm has higher earnings, but lower revenue than Ardelyx. Ardelyx is trading at a lower price-to-earnings ratio than KemPharm, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for KemPharm and Ardelyx, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
KemPharm presently has a consensus price target of $9.00, suggesting a potential upside of 122.22%. Ardelyx has a consensus price target of $13.67, suggesting a potential upside of 107.07%. Given KemPharm’s higher probable upside, equities research analysts plainly believe KemPharm is more favorable than Ardelyx.
This table compares KemPharm and Ardelyx’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
KemPharm has a beta of -1.09, indicating that its share price is 209% less volatile than the S&P 500. Comparatively, Ardelyx has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500.
Insider and Institutional Ownership
36.0% of KemPharm shares are held by institutional investors. Comparatively, 76.1% of Ardelyx shares are held by institutional investors. 25.4% of KemPharm shares are held by company insiders. Comparatively, 15.5% of Ardelyx shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
KemPharm beats Ardelyx on 6 of the 11 factors compared between the two stocks.
KemPharm Company Profile
KemPharm, Inc. is a clinical-stage specialty pharmaceutical company. The Company is engaged in the discovery and development of prodrugs. The Company uses its Ligand Activated Therapy (LAT) platform technology to create prodrugs. The Company’s product candidate, KP201/APAP, consists of KP201, its prodrug of hydrocodone, which is combined with acetaminophen (APAP). The Company is developing KP201/APAP as an immediate release (IR), a product candidate for the short-term, or no longer than 14 days for the management of acute pain. The Company has designed KP201/APAP with abuse-deterrent properties to address the epidemic of opioid abuse in the United States. The Company also focuses on developing the pipeline of additional prodrug product candidates that targets pain and attention deficit hyperactivity disorder (ADHD). The Company’s products include KP201/IR (APAP-free), KP511/ER, KP415, KP606/IR and KP746.
Ardelyx Company Profile
Ardelyx, Inc. is a clinical-stage biopharmaceutical company. The Company’s therapeutics focuses on addressing cardiorenal and gastrointestinal (GI) diseases. It operates through the research, development and commercialization of biopharmaceutical products segment. The Company’s products line includes cardiorenal portfolio and gastrointestinal portfolio. The Company’s cardiorenal portfolio includes two Phase III clinical product candidates, tenapanor in Phase III clinical development for treating hyperphosphatemia in end-stage renal disease (ESRD) patients on dialysis and RDX7675 in Phase III clinical development for treating hyperkalemia in chronic kidney disease (CKD) and heart failure patients. The cardiorenal portfolio includes tenapanor, RDX7675, RDX013 and RDX011. Its gastrointestinal portfolio is led by tenapanor for the treatment of irritable bowel syndrome with constipation (IBS-C). The gastrointestinal portfolio includes tenapanor, RDX8940, RDX011 and RDX023.
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