PTC Therapeutics (NASDAQ: PTCT) and Vital Therapies (NASDAQ:VTL) are both small-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Institutional and Insider Ownership

80.3% of PTC Therapeutics shares are held by institutional investors. Comparatively, 25.4% of Vital Therapies shares are held by institutional investors. 8.1% of PTC Therapeutics shares are held by insiders. Comparatively, 32.6% of Vital Therapies 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.

Earnings and Valuation

This table compares PTC Therapeutics and Vital Therapies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
PTC Therapeutics $82.71 million 7.89 -$142.11 million ($2.89) -5.44
Vital Therapies N/A N/A -$40.96 million ($1.34) -3.77

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

Profitability

This table compares PTC Therapeutics and Vital Therapies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PTC Therapeutics -75.64% -75.19% -31.76%
Vital Therapies N/A -70.76% -64.35%

Risk & Volatility

PTC Therapeutics has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, Vital Therapies has a beta of 5.3, meaning that its share price is 430% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for PTC Therapeutics and Vital Therapies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PTC Therapeutics 1 6 2 0 2.11
Vital Therapies 0 1 2 0 2.67

PTC Therapeutics currently has a consensus price target of $18.14, suggesting a potential upside of 15.34%. Vital Therapies has a consensus price target of $8.00, suggesting a potential upside of 58.42%. Given Vital Therapies’ stronger consensus rating and higher possible upside, analysts plainly believe Vital Therapies is more favorable than PTC Therapeutics.

Summary

Vital Therapies beats PTC Therapeutics on 8 of the 11 factors compared between the two stocks.

About PTC Therapeutics

PTC Therapeutics, Inc. is a biopharmaceutical company. The Company is focused on the discovery, development and commercialization of medicines using its expertise in ribonucleic acid (RNA) biology. Its product pipeline includes Ataluren (Translarna), PTC596 and RG7916. Its product candidate, ataluren, is an orally administered small-molecule compound for the treatment of patients with genetic disorders due to a nonsense mutation. Ataluren is in clinical development for the treatment of Duchenne muscular dystrophy caused by a nonsense mutation (nmDMD) and cystic fibrosis caused by a nonsense mutation (nmCF). PTC596 is an orally active small molecule that targets tumor stem cell populations by reducing the function, activity and amount of BMI1. RG7916 is an investigational oral therapeutic, which is in two clinical studies: SUNFISH, a trial in childhood onset (Type II/III) spinal muscular atrophy (SMA) patients, and FIREFISH, a trial in infant onset (Type I) SMA patients.

About Vital Therapies

Vital Therapies, Inc. is a biotherapeutic company. The Company is focused on developing a human hepatic cell-based treatment targeting acute forms of liver failure. Its product candidate, the ELAD System, is an extracorporeal human allogeneic cellular liver therapy designed to allow the patient’s liver to regenerate to a healthy state, or to stabilize the patient until transplant. The ELAD System is a liver support system containing immortal human liver-derived cells, or VTL C3A cells. The Company initiated a Phase III clinical trial in severe acute alcoholic hepatitis (sAAH), referred to as VTL-308. Its VTL-308 is a randomized, open-label, multicenter, controlled, pivotal study, designed to evaluate the ELAD System in subjects with sAAH. It is based on pre-specified and post-hoc analyses of its VTI-208 phase III clinical trial in alcohol-induced liver decompensation (AILD). The Company’s ELAD System consists of approximately four disposable ELAD C3A cell cartridges.

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