Critical Analysis: Stemline Therapeutics (STML) and Avid Bioservices (CDMO)

Stemline Therapeutics (NASDAQ:STML) and Avid Bioservices (NASDAQ:CDMO) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Stemline Therapeutics and Avid Bioservices, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stemline Therapeutics 0 0 6 0 3.00
Avid Bioservices 0 0 2 0 3.00

Stemline Therapeutics currently has a consensus price target of $25.40, suggesting a potential upside of 86.49%. Avid Bioservices has a consensus price target of $10.50, suggesting a potential upside of 150.00%. Given Avid Bioservices’ higher probable upside, analysts clearly believe Avid Bioservices is more favorable than Stemline Therapeutics.

Profitability

This table compares Stemline Therapeutics and Avid Bioservices’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stemline Therapeutics N/A -114.50% -90.21%
Avid Bioservices -3.52% -20.74% -13.57%

Insider & Institutional Ownership

64.8% of Stemline Therapeutics shares are owned by institutional investors. Comparatively, 40.0% of Avid Bioservices shares are owned by institutional investors. 14.8% of Stemline Therapeutics shares are owned by insiders. Comparatively, 0.9% of Avid Bioservices shares are owned 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.

Earnings and Valuation

This table compares Stemline Therapeutics and Avid Bioservices’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stemline Therapeutics $900,000.00 481.26 -$67.82 million ($2.94) -4.63
Avid Bioservices $53.62 million 4.39 -$21.81 million ($0.50) -8.40

Avid Bioservices has higher revenue and earnings than Stemline Therapeutics. Avid Bioservices is trading at a lower price-to-earnings ratio than Stemline Therapeutics, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Stemline Therapeutics has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Avid Bioservices has a beta of 2.61, indicating that its stock price is 161% more volatile than the S&P 500.

Summary

Avid Bioservices beats Stemline Therapeutics on 7 of the 13 factors compared between the two stocks.

About Stemline Therapeutics

Stemline Therapeutics, Inc., a clinical stage biopharmaceutical company, focuses on the discovery, acquisition, development, and commercialization of proprietary oncology therapeutics in the United States and internationally. The company develops SL-401, a targeted therapy directed to the interleukin-3 receptor (IL-3R), which has completed Phase II clinical trial for patients with blastic plasmacytoid dendritic cell neoplasm; is in Phase I/II clinical trials for patients with myeloproliferative neoplasms, chronic myelomonocytic leukemia, myelofibrosis, and acute myeloid leukemia; and is in Phase I clinical trial in combination with other agents for patients with relapsed/refractory multiple myeloma. It also develops SL-801, a novel oral small molecule reversible inhibitor of nuclear transport protein, which is in Phase I clinical trial for the treatment of solid and hematologic cancers; and SL-701, an immunotherapy that has completed Phase II clinical trial to attack brain cancer. The company's preclinical pipeline products include SL-501, a next generation IL-3R-targeted therapy; SL-101, a single chain monoclonal antibody fragment for the treatment of hematologic cancers; and SL-901, a small molecule kinase inhibitor. Stemline Therapeutics, Inc. was founded in 2003 and is based in New York, New York.

About Avid Bioservices

Avid Bioservices, Inc., a biologics contract development and manufacturing company, focuses on the development and current Good Manufacturing Practices (cGMP) manufacture of biopharmaceutical products derived from mammalian cell culture. It provides a range of process development, cGMP clinical, and commercial manufacturing services for the biotechnology and biopharmaceutical industries. The company produces monoclonal antibodies and recombinant proteins in batch, fed-batch, and perfusion modes; and offers services, including cGMP clinical and commercial product manufacturing, purification, bulk packaging, stability testing and regulatory strategy, submission, and support. It also provides various process development services, such as cell line development and optimization, cell culture and feed optimization, analytical methods development, and product characterization. The company was formerly known as Peregrine Pharmaceuticals, Inc. and changed its name to Avid Bioservices, Inc. in January 2018. Avid Bioservices, Inc. was founded in 1981 and is headquartered in Tustin, California.

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