Sol-Gel Technologies (NASDAQ:SLGL – Get Free Report) and Zentalis Pharmaceuticals (NASDAQ:ZNTL – Get Free Report) are both small-cap healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.
Analyst Ratings
This is a summary of current ratings and price targets for Sol-Gel Technologies and Zentalis Pharmaceuticals, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sol-Gel Technologies | 1 | 1 | 3 | 1 | 2.67 |
| Zentalis Pharmaceuticals | 1 | 4 | 4 | 0 | 2.33 |
Sol-Gel Technologies presently has a consensus target price of $197.50, suggesting a potential upside of 199.51%. Zentalis Pharmaceuticals has a consensus target price of $6.75, suggesting a potential upside of 92.31%. Given Sol-Gel Technologies’ stronger consensus rating and higher possible upside, equities analysts plainly believe Sol-Gel Technologies is more favorable than Zentalis Pharmaceuticals.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sol-Gel Technologies | $19.39 million | 9.56 | -$6.13 million | ($5.64) | -11.69 |
| Zentalis Pharmaceuticals | $67.43 million | 3.73 | -$137.06 million | ($1.95) | -1.80 |
Sol-Gel Technologies has higher earnings, but lower revenue than Zentalis Pharmaceuticals. Sol-Gel Technologies is trading at a lower price-to-earnings ratio than Zentalis Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Sol-Gel Technologies has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Zentalis Pharmaceuticals has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500.
Profitability
This table compares Sol-Gel Technologies and Zentalis Pharmaceuticals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sol-Gel Technologies | -910.14% | -44.05% | -36.96% |
| Zentalis Pharmaceuticals | N/A | -70.18% | -51.46% |
Institutional & Insider Ownership
26.2% of Sol-Gel Technologies shares are held by institutional investors. 66.5% of Sol-Gel Technologies shares are held by company insiders. Comparatively, 3.8% of Zentalis Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
Sol-Gel Technologies beats Zentalis Pharmaceuticals on 9 of the 15 factors compared between the two stocks.
About Sol-Gel Technologies
Sol-Gel Technologies Ltd., together with its subsidiary Sol-Gel Technologies Inc., develops topical dermatological drugs for patients with severe skin conditions in Israel. The company offers Twyneo, a once-daily, non-antibiotic topical cream for the treatment of acne vulgaris; and Epsolay, a once-daily topical cream for the treatment of papulopustular (subtype II) rosacea. It also develops SGT-610 that is in Phase 3 clinical trials for the treatment of Gorlin Syndrome; and SGT-210, which has completed Phase I clinical trial, to treat rare hyperkeratinization disorders, such as Darier, PC, PPK, Olmsted, etc. In addition, the company is also involved in the development of generic topical dermatological drug products. It has collaboration with Padagis Israel Pharmaceuticals Ltd; and license agreements with Galderma Holding SA and Searchlight Pharma Inc. Sol-Gel Technologies Ltd. was incorporated in 1997 and is headquartered in Ness Ziona, Israel.
About Zentalis Pharmaceuticals
Zentalis Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on discovering and developing small molecule therapeutics for the treatment of various cancers. Its products candidatures include the ZN-c3, an inhibitor of WEE1, a protein tyrosine kinase for the treatment of inhibitor for advanced solid tumors and hematological malignancies; in Phase 2 clinical trial as a monotherapy for the treatment of uterine serous carcinoma indications; Phase 2 clinical trial in Cyclin E1 driven high-grade serous ovarian cancer, fallopian tube, or primary peritoneal cancer; Phase 1/2 clinical trial in combination with PARPi for platinum-resistant ovarian cancer; Phase 1b clinical trial in combination with chemotherapy in platinum-resistant ovarian, and peritoneal or fallopian tube cancer; Phase 1/2 clinical trial in combination with chemotherapy in relapsed or refractory osteosarcoma; Phase 1/2 clinical trial with encorafenib and cetuximab for mutant metastatic colorectal cancer; and Phase 1/2 clinical trial in combination with chemotherapy in pancreatic cancer. The company's products pipeline also includes ZN-d5, an oral small molecule inhibitor of B-cell lymphoma 2, for hematological malignancies and related disorders; and BCL-xL heterobifunctional degrader, a member of the anti-apoptotic BCL-2 proteins, for solid tumors and hematological malignancies. Zentalis Pharmaceuticals, Inc. has licensing agreements and strategic collaborations with Recurium IP Holdings, LLC; Pfizer, Inc.; Zentera Therapeutics; Dana-Farber; and GlaxoSmithKline plc. The company was incorporated in 2014 and is headquartered in New York, New York.
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