Nexvet Biopharma plc (NASDAQ: NVET) and Ritter Pharmaceuticals (NASDAQ:RTTR) are both small-cap bio therapeutic drugs companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

48.4% of Nexvet Biopharma plc shares are held by institutional investors. Comparatively, 2.2% of Ritter Pharmaceuticals shares are held by institutional investors. 37.0% of Nexvet Biopharma plc shares are held by company insiders. Comparatively, 30.4% of Ritter Pharmaceuticals shares are held by company 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.

Analyst Ratings

This is a breakdown of recent recommendations for Nexvet Biopharma plc and Ritter Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexvet Biopharma plc 0 1 0 0 2.00
Ritter Pharmaceuticals 0 1 5 0 2.83

Nexvet Biopharma plc currently has a consensus target price of $6.72, suggesting a potential upside of 0.00%. Ritter Pharmaceuticals has a consensus target price of $3.40, suggesting a potential upside of 891.25%. Given Ritter Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts plainly believe Ritter Pharmaceuticals is more favorable than Nexvet Biopharma plc.

Profitability

This table compares Nexvet Biopharma plc and Ritter Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nexvet Biopharma plc N/A -102.72% -89.82%
Ritter Pharmaceuticals N/A -480.51% -235.87%

Valuation and Earnings

This table compares Nexvet Biopharma plc and Ritter Pharmaceuticals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Nexvet Biopharma plc N/A N/A N/A ($1.75) -3.84
Ritter Pharmaceuticals N/A N/A -$18.38 million ($1.16) -0.30

Nexvet Biopharma plc is trading at a lower price-to-earnings ratio than Ritter Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Nexvet Biopharma plc Company Profile

Nexvet Biopharma public limited company is a clinical-stage biopharmaceutical company focused on transforming the therapeutic market for companion animals by developing and commercializing species-specific biologics. The Company’s platform technology, which it refers to as PETization, is an algorithmic approach that enables the Company to create monoclonal antibodies (mAbs) a type of biologic, that are designed to be recognized as self or native by an animal’s immune system, a property referred to as 100% species-specificity. PETization is designed to build upon the safety and efficacy data from clinically tested human therapies to create new therapies for companion animals. Biologics generally include mAbs, which are targeted antibodies derived from identical (clonal) cells. The Company’s advanced product candidates are in pivotal-phase development: ranevetmab (or NV-01) and frunevetmab (or NV-02).

Ritter Pharmaceuticals Company Profile

Ritter Pharmaceuticals, Inc. develops therapeutic products that modulate the human gut microbiome to treat gastrointestinal diseases. The Company’s segment is focusing on the development and commercialization of RP-G28. The Company conducts human gut health research by exploring metabolic capacity of the gut microbiota and translating the functionality of prebiotic-based therapeutics into applications intended to have impact on a patient’s health. The Company’s compound, RP-G28, is under development for the treatment of lactose intolerance. The Company has completed a Phase IIa clinical trial of its product candidate, RP-G28, an orally administered oligosaccharide. RP-G28 is designed to stimulate the growth of lactose-metabolizing bacteria in the colon. The Company has not generated any revenues.

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