Edge Therapeutics (NASDAQ: EDGE) and Ardelyx (NASDAQ:ARDX) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Edge Therapeutics and Ardelyx, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Edge Therapeutics 0 1 1 0 2.50
Ardelyx 0 0 5 0 3.00

Edge Therapeutics presently has a consensus price target of $25.50, suggesting a potential upside of 137.21%. Ardelyx has a consensus price target of $16.40, suggesting a potential upside of 182.76%. Given Ardelyx’s stronger consensus rating and higher possible upside, analysts plainly believe Ardelyx is more favorable than Edge Therapeutics.

Risk and Volatility

Edge Therapeutics has a beta of 2.69, indicating that its stock price is 169% more volatile than the S&P 500. Comparatively, Ardelyx has a beta of 0.19, indicating that its stock price is 81% less volatile than the S&P 500.

Profitability

This table compares Edge Therapeutics and Ardelyx’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Edge Therapeutics N/A -56.88% -43.74%
Ardelyx N/A -62.60% -56.57%

Insider & Institutional Ownership

49.3% of Edge Therapeutics shares are held by institutional investors. Comparatively, 78.5% of Ardelyx shares are held by institutional investors. 36.2% of Edge Therapeutics shares are held by insiders. Comparatively, 15.5% of Ardelyx shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Edge Therapeutics and Ardelyx’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Edge Therapeutics N/A N/A -$38.82 million ($1.56) -6.89
Ardelyx $24.03 million 11.45 -$112.38 million ($2.44) -2.38

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

Summary

Edge Therapeutics beats Ardelyx on 6 of the 11 factors compared between the two stocks.

Edge Therapeutics Company Profile

Edge Therapeutics, Inc. is a clinical-stage biotechnology company that discovers, develops and seeks to commercialize hospital-based therapies capable of transforming treatment paradigms in the management of acute, life-threatening critical care conditions. The Company’s initial product candidates target rare, acute, life-threatening neurological and other conditions. The Company’s product candidates utilize its programmable, biodegradable polymer-based development platform (the Precisa Platform), a delivery mechanism that seeks to enable targeted and sustained drug exposure and avoid the dose-limiting side effects associated with the current standards of care. The Company’s product candidates include EG-1962 and EG-1964. EG-1962 is a polymer-based microsphere containing nimodipine suspended in a diluent of sodium hyaluronate was developed using its Precisa development platform to improve patient outcomes following aneurysmal subarachnoid hemorrhage (aSAH).

Ardelyx Company Profile

Ardelyx, Inc. is a clinical-stage biopharmaceutical company. The Company’s therapeutics focuses on addressing cardiorenal and gastrointestinal (GI) diseases. It operates through the research, development and commercialization of biopharmaceutical products segment. The Company’s products line includes cardiorenal portfolio and gastrointestinal portfolio. The Company’s cardiorenal portfolio includes two Phase III clinical product candidates, tenapanor in Phase III clinical development for treating hyperphosphatemia in end-stage renal disease (ESRD) patients on dialysis and RDX7675 in Phase III clinical development for treating hyperkalemia in chronic kidney disease (CKD) and heart failure patients. The cardiorenal portfolio includes tenapanor, RDX7675, RDX013 and RDX011. Its gastrointestinal portfolio is led by tenapanor for the treatment of irritable bowel syndrome with constipation (IBS-C). The gastrointestinal portfolio includes tenapanor, RDX8940, RDX011 and RDX023.

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