Versartis (NASDAQ: VSAR) and Exelixis (NASDAQ:EXEL) are both healthcare companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Earnings and Valuation

This table compares Versartis and Exelixis’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Versartis N/A N/A -$95.81 million ($3.92) -0.54
Exelixis $191.45 million 47.61 -$70.22 million $0.49 62.88

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Versartis and Exelixis, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Versartis 0 7 2 0 2.22
Exelixis 0 6 6 0 2.50

Versartis currently has a consensus price target of $5.63, indicating a potential upside of 165.33%. Exelixis has a consensus price target of $31.71, indicating a potential upside of 2.94%. Given Versartis’ higher probable upside, equities research analysts plainly believe Versartis is more favorable than Exelixis.

Institutional and Insider Ownership

49.2% of Versartis shares are owned by institutional investors. Comparatively, 81.2% of Exelixis shares are owned by institutional investors. 10.9% of Versartis shares are owned by company insiders. Comparatively, 5.1% of Exelixis shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Versartis and Exelixis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Versartis N/A -131.09% -79.18%
Exelixis 36.80% 105.47% 27.22%

Volatility and Risk

Versartis has a beta of 2.35, suggesting that its stock price is 135% more volatile than the S&P 500. Comparatively, Exelixis has a beta of 1.89, suggesting that its stock price is 89% more volatile than the S&P 500.

Summary

Exelixis beats Versartis on 10 of the 13 factors compared between the two stocks.

About Versartis

Versartis, Inc. is an endocrine-focused biopharmaceutical company. The Company is engaged in developing a long-acting form of recombinant human growth hormone, somavaratan (VRS-317), for growth hormone deficiency (GHD), an orphan disease. The Company’s first indication for somavaratan is pediatric GHD. The Company may develop somavaratan for additional growth disorders, such as idiopathic short stature (ISS), small for gestational age (SGA) and Turner Syndrome. Somavaratan is engineered using XTEN technology to extend the residence time in the bloodstream by reducing the clearance of recombinant human growth hormone (rhGH) from the body by the two primary mechanisms, kidney filtration and receptor mediated clearance.

About Exelixis

Exelixis, Inc. is a biopharmaceutical company. The Company is focused on discovery, development and commercialization of new medicines to manage care and outcomes for people with cancer. The Company’s cabozantinib product is an inhibitor of multiple tyrosine kinases, including MET, AXL, and VEGF receptors. The Company’s CABOMETYX tablets are approved for previously treated advanced kidney cancer and COMETRIQ capsules are approved for progressive, metastatic medullary thyroid cancer. The third product, Cotellic, is a formulation of cobimetinib, a selective inhibitor of MEK is approved as part of a combination regimen to treat advanced melanoma. Both cabozantinib and cobimetinib have shown potential in a range of forms of cancer and are the subjects of broad clinical development programs. The Company’s XL888 is a small molecule oral inhibitor of Heat Shock Protein 90 (HSP90), a molecular chaperone protein.

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