Financial Review: Novartis (NYSE:NVS) versus NRx Pharmaceuticals (NASDAQ:NRXP)

Novartis (NYSE:NVS) and NRx Pharmaceuticals (NASDAQ:NRXP) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Profitability

This table compares Novartis and NRx Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novartis	23.29%	38.56%	14.47%
NRx Pharmaceuticals	-691.81%	N/A	-63.92%

Insider and Institutional Ownership

13.1% of Novartis shares are owned by institutional investors. Comparatively, 4.3% of NRx Pharmaceuticals shares are owned by institutional investors. 0.0% of Novartis shares are owned by insiders. Comparatively, 6.4% of NRx Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Novartis and NRx Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novartis	2	12	6	0	2.20
NRx Pharmaceuticals	2	0	5	0	2.43

Novartis presently has a consensus price target of $145.60, suggesting a potential upside of 1.34%. NRx Pharmaceuticals has a consensus price target of $34.50, suggesting a potential upside of 1,110.53%. Given NRx Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts plainly believe NRx Pharmaceuticals is more favorable than Novartis.

Earnings and Valuation

This table compares Novartis and NRx Pharmaceuticals”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novartis	$54.53 billion	5.03	$13.98 billion	$6.63	21.67
NRx Pharmaceuticals	$1.23 million	100.33	-$28.62 million	($0.55)	-5.18

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

Risk & Volatility

Novartis has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, NRx Pharmaceuticals has a beta of 2.07, indicating that its share price is 107% more volatile than the S&P 500.

Summary

Novartis beats NRx Pharmaceuticals on 9 of the 14 factors compared between the two stocks.

About Novartis

Novartis AG engages in the research, development, manufacture, and marketing of healthcare products in Switzerland and internationally. The company offers prescription medicines for patients and physicians. It focuses on therapeutic areas, such as cardiovascular, renal and metabolic, immunology, neuroscience, and oncology, as well as ophthalmology and hematology. Novartis AG has a license and collaboration agreement with Alnylam Pharmaceuticals to develop, manufacture, and commercialize inclisiran, a therapy to reduce LDL cholesterol; and Dawn Health for the development and commercialization of Ekiva, a digital solution designed for people living with Paroxysmal Nocturnal Hemoglobinuria. The company was incorporated in 1996 and is headquartered in Basel, Switzerland.

About NRx Pharmaceuticals

NRx Pharmaceuticals, Inc., a clinical-stage bio-pharmaceutical company, develops novel therapeutics for the treatment of central nervous system disorders, including suicidal depression, post-traumatic stress disorder, and chronic pain. Its products include NRX-101 (D-cycloserine/Lurasidone), an oral, fixed dosed combination of D-cycloserine and lurasidone that earned food and drug administration-designated breakthrough therapy for suicidal treatment-resistant bipolar depression; and NRX-100 (ketamine), which has been awarded FDA fast track designation for the treatment of severe bipolar depression with acute suicidal ideation and behavior. The company has a partnership with Alvogen Inc. and Lotus Pharmaceutical Company; development and manufacturing agreement with Nephron Pharmaceuticals, Inc. and Alcami; license agreement with Apkarian Technologies; development and license agreement with Glytech; license agreement with Sarah Herzog Memorial Hospital. The company was founded in 2015 and is based in Wilmington, Delaware.