VIVUS (NASDAQ: VVUS) and Alimera Sciences (NASDAQ:ALIM) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Institutional & Insider Ownership

35.8% of VIVUS shares are owned by institutional investors. Comparatively, 37.2% of Alimera Sciences shares are owned by institutional investors. 3.0% of VIVUS shares are owned by insiders. Comparatively, 14.0% of Alimera Sciences shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares VIVUS and Alimera Sciences’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
VIVUS $133.40 million 0.69 $67.14 million $0.31 2.81
Alimera Sciences $35.96 million 2.65 -$16.78 million ($0.39) -3.54

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

Analyst Recommendations

This is a summary of recent ratings and price targets for VIVUS and Alimera Sciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VIVUS 0 0 0 0 N/A
Alimera Sciences 0 0 3 0 3.00

Alimera Sciences has a consensus price target of $4.00, indicating a potential upside of 189.86%. Given Alimera Sciences’ higher possible upside, analysts clearly believe Alimera Sciences is more favorable than VIVUS.

Volatility and Risk

VIVUS has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Alimera Sciences has a beta of 2.22, indicating that its stock price is 122% more volatile than the S&P 500.

Profitability

This table compares VIVUS and Alimera Sciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VIVUS 24.72% 3,746.48% 11.02%
Alimera Sciences -68.58% N/A -36.39%

VIVUS Company Profile

VIVUS, Inc. is a biopharmaceutical company. The Company operates in the development and commercialization of therapeutic products segment. It provides over two therapies approved by the Food and Drug Association (FDA), which include Qsymia (phentermine and topiramate extended-release) for chronic weight management and STENDRA (avanafil) for erectile dysfunction (ED). The Company has completed the Phase II studies of Qsymia for the indication of Obstructive Sleep Apnea (OSA) and diabetes. Its Qsymia is available in over 40,000 certified retail pharmacies across the country. Its STENDRA is also approved by the European Commission (EC), under the name, SPEDRA, for the treatment of ED in the Europe. The United States Food and Drug Association approved a Supplemental New Drug Application (sNDA) for STENDRA. STENDRA is indicated to be taken approximately 15 minutes before sexual activity.

Alimera Sciences Company Profile

Alimera Sciences, Inc. (Alimera) is a pharmaceutical company. The Company is engaged in the research, development and commercialization of prescription ophthalmic pharmaceuticals. The Company operates through two segments: U.S. and International. The Company focuses on diseases affecting the back of the eye or retina. The Company’s product is ILUVIEN, which is developed to treat diabetic macular edema (DME). DME is a disease of the retina that affects individuals with diabetes and can lead to severe vision loss and blindness. In the United States, ILUVIEN is indicated for the treatment of DME in patients who have been treated with a course of corticosteroids and did not have a rise in intraocular pressure (IOP). In the European Economic Area (EEA) countries, ILUVIEN is indicated for the treatment of vision impairment associated with DME considered insufficiently responsive to available therapies.

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