Five Prime Therapeutics (NASDAQ: FPRX) and Dermira (NASDAQ:DERM) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.
This table compares Five Prime Therapeutics and Dermira’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Five Prime Therapeutics||-356.39%||-31.78%||-27.55%|
Volatility & Risk
Five Prime Therapeutics has a beta of 4.16, suggesting that its share price is 316% more volatile than the S&P 500. Comparatively, Dermira has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.
Institutional & Insider Ownership
84.1% of Five Prime Therapeutics shares are held by institutional investors. Comparatively, 97.6% of Dermira shares are held by institutional investors. 6.5% of Five Prime Therapeutics shares are held by insiders. Comparatively, 13.3% of Dermira shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a summary of recent ratings and recommmendations for Five Prime Therapeutics and Dermira, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Five Prime Therapeutics||0||0||7||0||3.00|
Five Prime Therapeutics presently has a consensus target price of $61.20, suggesting a potential upside of 70.90%. Dermira has a consensus target price of $44.40, suggesting a potential upside of 68.89%. Given Five Prime Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Five Prime Therapeutics is more favorable than Dermira.
Valuation and Earnings
This table compares Five Prime Therapeutics and Dermira’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Five Prime Therapeutics||$32.90 million||30.46||-$133.09 million||($4.24)||-8.45|
|Dermira||$24.72 million||44.23||-$102.21 million||($2.65)||-9.92|
Dermira has higher revenue, but lower earnings than Five Prime Therapeutics. Dermira is trading at a lower price-to-earnings ratio than Five Prime Therapeutics, indicating that it is currently the more affordable of the two stocks.
Dermira beats Five Prime Therapeutics on 7 of the 13 factors compared between the two stocks.
Five Prime Therapeutics Company Profile
Five Prime Therapeutics, Inc. is a clinical-stage biotechnology company focused on discovering and developing protein therapeutics. The Company’s product candidates include Cabiralizumab (FPA008), which is an antibody that inhibits colony stimulating factor-1 receptor, that it is studying in clinical trials as a monotherapy in pigmented villonodular synovitis, and in multiple cancers in combination with programmed-death 1 immune checkpoint inhibitor, Opdivo; FPA144, which is an antibody that inhibits fibroblast growth factor receptor 2b, that it is initially developing to treat patients with gastric (stomach) cancer and is in a Phase I clinical trial, and FP-1039, which is a fusion protein that traps and neutralizes cancer-promoting fibroblast growth factors, involved in cancer cell proliferation and new blood vessel formation and is in Phase Ib clinical development to treat patients with malignant pleural mesothelioma. Its preclinical programs include FPA150, FPA154 and FPT155.
Dermira Company Profile
Dermira, Inc. is a biopharmaceutical company. The Company is focused on the development of therapeutic solutions in medical dermatology to treat skin conditions, such as hyperhidrosis, psoriasis and acne. Its portfolio includes three late-stage product candidates: Cimzia (certolizumab pegol), glycopyrronium tosylate and olumacostat glasaretil. Cimzia is an injectable biologic tumor necrosis factor-alpha inhibitor, or TNF inhibitor that is approved and marketed for the treatment of numerous inflammatory diseases spanning multiple medical specialties, including rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis and Crohn’s disease, in multiple countries, including the United States. Glycopyrronium tosylate is a small molecule anticholinergic product for topical application for the treatment of primary axillary hyperhidrosis. Olumacostat glasaretil is a small molecule that targets sebum production following topical application for the treatment of acne.
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