Organovo (NASDAQ: ONVO) and Oncomed Pharmaceuticals (NASDAQ:OMED) are both small-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Organovo and Oncomed Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Organovo -881.93% -69.03% -63.00%
Oncomed Pharmaceuticals -298.57% N/A -48.03%

Risk & Volatility

Organovo has a beta of 2.61, indicating that its stock price is 161% more volatile than the S&P 500. Comparatively, Oncomed Pharmaceuticals has a beta of 2.23, indicating that its stock price is 123% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Organovo and Oncomed Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Organovo 0 2 3 0 2.60
Oncomed Pharmaceuticals 0 6 2 0 2.25

Organovo currently has a consensus price target of $3.94, indicating a potential upside of 261.24%. Oncomed Pharmaceuticals has a consensus price target of $6.00, indicating a potential upside of 191.26%. Given Organovo’s stronger consensus rating and higher possible upside, analysts plainly believe Organovo is more favorable than Oncomed Pharmaceuticals.

Insider and Institutional Ownership

25.3% of Organovo shares are owned by institutional investors. Comparatively, 39.5% of Oncomed Pharmaceuticals shares are owned by institutional investors. 10.2% of Organovo shares are owned by company insiders. Comparatively, 32.8% of Oncomed Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Organovo and Oncomed Pharmaceuticals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Organovo $4.23 million 28.56 -$38.44 million ($0.36) -3.03
Oncomed Pharmaceuticals $25.15 million 3.10 -$103.10 million ($1.90) -1.08

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

Organovo Company Profile

Organovo Holdings, Inc. is an early commercial-stage company focused on developing and commercializing functional human tissues. The Company focuses on the generation of three-dimensional (3D) human tissues, by utilizing its platform technology to create human tissue constructs in 3D. It is focused on development of products, including 3D human tissues used for the preclinical assessment of drug effects, including applications in predictive toxicology, absorption, distribution, metabolism, excretion (ADME), and drug metabolism and pharmacokinetics (DMPK); customized human tissues as living, dynamic models of human biology or disease, for use in drug discovery and development, and three-dimensional human tissues for clinical applications, such as blood vessels for bypass grafting, nerve grafts for nerve damage repair and functional tissue patches for the repair or replacement of damaged tissues and organs.

Oncomed Pharmaceuticals Company Profile

OncoMed Pharmaceuticals, Inc. (OncoMed) is a clinical-stage biopharmaceutical company. The Company focuses on discovering and developing therapeutics that address the fundamental biology driving cancer’s growth, resistance, recurrence and metastasis. The Company’s therapeutic candidates and preclinical programs include Demcizumab (Anti-DLL4, OMP-21M18), Tarextumab (Anti-Notch2/3, OMP-59R5), Vantictumab (anti-Fzd7, OMP-18R5), Ipafricept (Fzd8-Fc, OMP-54F28), Brontictuzumab (Anti-Notch1, OMP-52M51), Navicixizumab (Anti-DLL4/VEGF Bispecific, OMP-305B83), Anti-RSPO3 (OMP-131R10), Anti-TIGIT (OMP-313M32) and GITRL-Fc trimer (OMP-336B11). Demcizumab is a humanized monoclonal antibody that inhibits Delta-like Ligand 4 (DLL4) in the Notch signaling pathway. Tarextumab is a human monoclonal antibody that binds to both the Notch2 and Notch3 receptors.

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