Critical Analysis: Mirum Pharmaceuticals (NASDAQ:MIRM) and Natera (NASDAQ:NTRA)

Mirum Pharmaceuticals (NASDAQ:MIRM) and Natera (NASDAQ:NTRA) are both healthcare companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Profitability

This table compares Mirum Pharmaceuticals and Natera’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mirum Pharmaceuticals	-139.18%	-36.28%	-8.54%
Natera	-7.11%	-11.38%	-7.87%

Valuation and Earnings

This table compares Mirum Pharmaceuticals and Natera”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mirum Pharmaceuticals	$521.31 million	12.53	-$23.36 million	($14.55)	-6.92
Natera	$2.31 billion	20.48	-$208.16 million	($1.36)	-240.93

Mirum Pharmaceuticals has higher earnings, but lower revenue than Natera. Natera is trading at a lower price-to-earnings ratio than Mirum Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for Mirum Pharmaceuticals and Natera, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mirum Pharmaceuticals	1	0	13	1	2.93
Natera	1	4	15	2	2.82

Mirum Pharmaceuticals currently has a consensus price target of $137.31, indicating a potential upside of 36.45%. Natera has a consensus price target of $319.38, indicating a potential downside of 2.53%. Given Mirum Pharmaceuticals’ stronger consensus rating and higher possible upside, equities analysts plainly believe Mirum Pharmaceuticals is more favorable than Natera.

Risk and Volatility

Mirum Pharmaceuticals has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Natera has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500.

Insider & Institutional Ownership

99.9% of Natera shares are held by institutional investors. 8.3% of Mirum Pharmaceuticals shares are held by insiders. Comparatively, 5.0% of Natera shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Natera beats Mirum Pharmaceuticals on 10 of the 15 factors compared between the two stocks.

About Mirum Pharmaceuticals

Mirum Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of novel therapies for debilitating rare and orphan diseases. Its lead product candidate is LIVMARLI (maralixibat), an orally administered and minimally absorbed ileal bile acid transporter (IBAT) inhibitor that is approved for the treatment of cholestatic pruritus in patients with Alagille syndrome in the United States and internationally. The company is also involved in the commercialization of Cholbam, a cholic acid capsule, which is approved as treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects and for adjunctive treatment of patients with peroxisomal disorders, including peroxisome biogenesis disorder-Zellweger spectrum disorder and Smith-Lemli-Opitz syndrome; and Chenodal, a tablet, which is approved for the treatment of radiolucent stones in the gallbladder, and under Phase 3 development for the treatment cerebrotendinous xanthomatosis. In addition, it develops Volixibat, an oral and minimally absorbed agent designed to inhibit IBAT, currently under Phase 2b clinical trial for the treatment of adult patients with cholestatic liver diseases. The company was incorporated in 2018 and is headquartered in Foster City, California.

About Natera

Natera, Inc., a diagnostics company, develops and commercializes molecular testing services worldwide. Its products include Panorama, a non-invasive prenatal test that screens for chromosomal abnormalities of a fetus, as well as in twin pregnancies; Horizon carrier screening test for individuals and couples determine if they are carriers of genetic variations that cause certain genetic conditions; Vistara single-gene NIPT screens for 25 single-gene disorders that cause severe skeletal, cardiac, and neurological conditions; Spectrum, preimplantation genetic tests for couples undergoing IVF; Anora that analyzes miscarriage tissue from women; Empower, a hereditary cancer screening test; and non-invasive prenatal paternity product, which allows a couple to establish paternity without waiting for the child to be born. The company also provides Signatera, a ctDNA blood test for molecular residual disease assessment and surveillance of disease recurrence in patients previously diagnosed with cancer; Altera, a tissue based comprehensive genomic profiling test; Prospera to assess active rejection in patients who have undergone kidney, heart, and lung transplantation; and Renasight, a kidney gene panel test. In addition, it offers Constellation, a cloud-based software product that enables laboratory customers to gain access through the cloud to the company's algorithms and bioinformatics to validate and launch tests. The company offers products through its direct sales force, as well as through a network of laboratory and distribution partners. It has a partnership agreement with BGI Genomics Co., Ltd. to develop, manufacture, and commercialize NGS-based genetic testing assays; and Foundation Medicine, Inc. to develop and commercialize personalized circulating tumor DNA monitoring assays. The company was founded in 2003 and is headquartered in Austin, Texas.