SUMMIT THERAPEU/S (NASDAQ:SMMT) and Aldeyra Therapeutics (NASDAQ:ALDX) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings for SUMMIT THERAPEU/S and Aldeyra Therapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SUMMIT THERAPEU/S 0 1 2 0 2.67
Aldeyra Therapeutics 0 1 4 0 2.80

SUMMIT THERAPEU/S presently has a consensus target price of $2.50, indicating a potential upside of 86.57%. Aldeyra Therapeutics has a consensus target price of $31.00, indicating a potential upside of 453.57%. Given Aldeyra Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Aldeyra Therapeutics is more favorable than SUMMIT THERAPEU/S.

Institutional & Insider Ownership

18.8% of SUMMIT THERAPEU/S shares are held by institutional investors. Comparatively, 59.5% of Aldeyra Therapeutics shares are held by institutional investors. 13.5% of Aldeyra Therapeutics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

SUMMIT THERAPEU/S has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, Aldeyra Therapeutics has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Valuation & Earnings

This table compares SUMMIT THERAPEU/S and Aldeyra Therapeutics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SUMMIT THERAPEU/S $56.50 million 0.33 $9.99 million $0.84 1.60
Aldeyra Therapeutics N/A N/A -$38.89 million ($1.79) -3.13

SUMMIT THERAPEU/S has higher revenue and earnings than Aldeyra Therapeutics. Aldeyra Therapeutics is trading at a lower price-to-earnings ratio than SUMMIT THERAPEU/S, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares SUMMIT THERAPEU/S and Aldeyra Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SUMMIT THERAPEU/S 24.32% 26.31% 18.17%
Aldeyra Therapeutics N/A -70.94% -62.07%

Summary

SUMMIT THERAPEU/S beats Aldeyra Therapeutics on 8 of the 13 factors compared between the two stocks.

SUMMIT THERAPEU/S Company Profile

Summit Therapeutics plc, a biopharmaceutical company, focuses on the discovery, development, and commercialization of novel medicines to treat rare and infectious diseases in the United Kingdom and North America. It is conducting clinical programmes focused on the genetic disease Duchenne muscular dystrophy (DMD) and the infectious disease Clostridium difficile infection (CDI). The company's lead DMD product candidate is ezutromid, an orally administered small molecule, which is in Phase II clinical trial; and lead CDI product candidate is ridinilazole, an orally administered small molecule antibiotic that has completed Phase II clinical trials. It has strategic alliance with the University of Oxford to develop utrophin modulators. The company was formerly known as Summit Corporation plc and changed its name to Summit Therapeutics plc in February 2015. Summit Therapeutics plc was founded in 2003 and is based in Abingdon, the United Kingdom.

Aldeyra Therapeutics Company Profile

Aldeyra Therapeutics, Inc., a biotechnology company, focuses on the development of products for inflammation, inborn errors of metabolism, and other diseases in the United States and internationally. It is developing ADX-102, a small molecule designed to trap and allow for the degradation of aldehydes, as well as ADX-103 and ADX-104 novel candidates for the treatment of noninfectious anterior uveitis, allergic conjunctivitis, dry eye syndrome, sjögren-larsson syndrome, and succinic semi-aldehyde dehydrogenase deficiency. Aldeyra Therapeutics, Inc. has a collaborative research agreement with Janssen Research & Development, LLC for the development of novel immune-modulating drugs for systemic inflammatory diseases. The company was formerly known as Aldexa Therapeutics, Inc. and changed its name to Aldeyra Therapeutics, Inc. in March 2014. Aldeyra Therapeutics, Inc. was founded in 2004 and is headquartered in Lexington, Massachusetts.

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