Reviewing Praxis Precision Medicines (NASDAQ:PRAX) & Dr. Reddy’s Laboratories (NYSE:RDY)

Dr. Reddy’s Laboratories (NYSE:RDY) and Praxis Precision Medicines (NASDAQ:PRAX) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional and Insider Ownership

3.8% of Dr. Reddy’s Laboratories shares are owned by institutional investors. Comparatively, 67.8% of Praxis Precision Medicines shares are owned by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are owned by company insiders. Comparatively, 2.7% of Praxis Precision Medicines shares are owned 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.

Analyst Ratings

This is a summary of recent ratings and price targets for Dr. Reddy’s Laboratories and Praxis Precision Medicines, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dr. Reddy’s Laboratories	0	1	1	0	2.50
Praxis Precision Medicines	1	0	8	0	2.78

Dr. Reddy’s Laboratories presently has a consensus target price of $17.00, suggesting a potential upside of 21.47%. Praxis Precision Medicines has a consensus target price of $123.33, suggesting a potential upside of 242.59%. Given Praxis Precision Medicines’ stronger consensus rating and higher possible upside, analysts clearly believe Praxis Precision Medicines is more favorable than Dr. Reddy’s Laboratories.

Risk and Volatility

Dr. Reddy’s Laboratories has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, Praxis Precision Medicines has a beta of 2.66, meaning that its stock price is 166% more volatile than the S&P 500.

Earnings & Valuation

This table compares Dr. Reddy’s Laboratories and Praxis Precision Medicines”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dr. Reddy’s Laboratories	$311.31 billion	0.04	$668.00 million	$0.63	22.21
Praxis Precision Medicines	$8.55 million	84.87	-$123.28 million	($10.27)	-3.51

Dr. Reddy’s Laboratories has higher revenue and earnings than Praxis Precision Medicines. Praxis Precision Medicines is trading at a lower price-to-earnings ratio than Dr. Reddy’s Laboratories, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dr. Reddy’s Laboratories and Praxis Precision Medicines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dr. Reddy’s Laboratories	17.25%	17.87%	12.32%
Praxis Precision Medicines	-9,409.22%	-54.86%	-50.52%

About Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company worldwide. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segments. The company’s Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. The Others segment engages in developing therapies in the fields of oncology and inflammation; research and development of differentiated formulations; and provides digital healthcare and information technology enabled business support services. The company offers its products for various therapeutic categories primarily include gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology. Dr. Reddy’s Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.

About Praxis Precision Medicines

Praxis Precision Medicines, Inc., a clinical-stage biopharmaceutical company, engages in the development of therapies for central nervous system disorders characterized by neuronal excitation-inhibition imbalance. It is developing ulixacaltamide, a small molecule inhibitor of T-type calcium channels that is in Phase III clinical trial for the treatment of essential tremor; PRAX-562 for the treatment of pediatric patients with developmental and epileptic encephalopathies (DEE); and PRAX-628 to treat focal epilepsy. The company also develops PRAX-222 for the treatment of pediatric patients with early-onset SCN2A-DEE; PRAX-020 to treat KCNT1 related epilepsies; PRAX-080 for the treatment of PCDH19; and PRAX-090 and PRAX-100 for SYNGAP1 and SCN2A-LoF. It has a license agreement with RogCon Inc.; a research collaboration and license agreement with Ionis Pharmaceuticals, Inc.; a strategic collaboration and license agreement with UCB Biopharma SRL; and collaboration with The Florey Institute to develop three novel ASOs. The company was incorporated in 2015 and is based in Boston, Massachusetts.