Comparing Evoke Pharma (NASDAQ:EVOK) and Dr. Reddy’s Laboratories (NYSE:RDY)

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

Analyst Recommendations

This is a breakdown of recent ratings for Evoke Pharma and Dr. Reddy’s Laboratories, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evoke Pharma	0	0	0	0	0.00
Dr. Reddy’s Laboratories	0	2	2	1	2.80

Dr. Reddy’s Laboratories has a consensus target price of $16.95, indicating a potential upside of 17.55%. Given Dr. Reddy’s Laboratories’ stronger consensus rating and higher possible upside, analysts clearly believe Dr. Reddy’s Laboratories is more favorable than Evoke Pharma.

Valuation and Earnings

This table compares Evoke Pharma and Dr. Reddy’s Laboratories”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evoke Pharma	$12.79 million	0.62	-$5.35 million	($2.56)	-1.98
Dr. Reddy’s Laboratories	$3.81 billion	3.16	$663.00 million	$0.66	21.85

Dr. Reddy’s Laboratories has higher revenue and earnings than Evoke Pharma. Evoke Pharma 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.

Volatility and Risk

Evoke Pharma has a beta of -0.13, meaning that its share price is 113% less volatile than the S&P 500. Comparatively, Dr. Reddy’s Laboratories has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Insider & Institutional Ownership

3.9% of Dr. Reddy’s Laboratories shares are owned by institutional investors. 2.3% of Evoke Pharma shares are owned by company insiders. Comparatively, 2.0% of Dr. Reddy’s Laboratories shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Evoke Pharma and Dr. Reddy’s Laboratories’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evoke Pharma	-42.07%	-99.48%	-33.58%
Dr. Reddy’s Laboratories	16.99%	17.25%	11.63%

Summary

Dr. Reddy’s Laboratories beats Evoke Pharma on 14 of the 15 factors compared between the two stocks.

About Evoke Pharma

Evoke Pharma, Inc., a specialty pharmaceutical company, primarily focuses on the development and commercialization of drugs for the treatment of gastroenterological disorders and diseases. It offers Gimoti, a metoclopramide nasal spray to treat symptoms associated with acute and recurrent diabetic gastroparesis in adults. The company markets its products to gastroenterologists, internal medicine specialists, primary care physicians, and select health care providers. Evoke Pharma, Inc. was incorporated in 2007 and is headquartered in Solana Beach, California.

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.