Critical Analysis: Amneal Pharmaceuticals (NASDAQ:AMRX) versus Neurocrine Biosciences (NASDAQ:NBIX)

Neurocrine Biosciences (NASDAQ:NBIX) and Amneal Pharmaceuticals (NASDAQ:AMRX) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Neurocrine Biosciences and Amneal Pharmaceuticals”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neurocrine Biosciences	$2.86 billion	4.83	$478.60 million	$6.82	19.93
Amneal Pharmaceuticals	$3.12 billion	1.94	$72.06 million	$0.49	38.57

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Neurocrine Biosciences and Amneal Pharmaceuticals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neurocrine Biosciences	0	5	18	1	2.83
Amneal Pharmaceuticals	1	0	9	0	2.80

Neurocrine Biosciences currently has a consensus price target of $201.14, suggesting a potential upside of 47.99%. Amneal Pharmaceuticals has a consensus price target of $21.00, suggesting a potential upside of 11.11%. Given Neurocrine Biosciences’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Neurocrine Biosciences is more favorable than Amneal Pharmaceuticals.

Profitability

This table compares Neurocrine Biosciences and Amneal Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neurocrine Biosciences	20.91%	22.43%	15.64%
Amneal Pharmaceuticals	5.05%	-584.46%	7.78%

Institutional and Insider Ownership

92.6% of Neurocrine Biosciences shares are held by institutional investors. Comparatively, 31.8% of Amneal Pharmaceuticals shares are held by institutional investors. 4.6% of Neurocrine Biosciences shares are held by insiders. Comparatively, 17.3% of Amneal Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Neurocrine Biosciences has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500. Comparatively, Amneal Pharmaceuticals has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Summary

Neurocrine Biosciences beats Amneal Pharmaceuticals on 11 of the 15 factors compared between the two stocks.

About Neurocrine Biosciences

Neurocrine Biosciences, Inc. discovers, develops, and markets pharmaceuticals for neurological, neuroendocrine, and neuropsychiatric disorders in the United States and internationally. The company’s products include INGREZZA for tardive dyskinesia and chorea associated with Huntington’s disease; ALKINDI for adrenal insufficiency; Efmody capsules for classic congenital adrenal hyperplasia; Orilissa tablets for endometriosis; and Oriahnn capsules to treat uterine fibroids. Its product candidates in clinical development include valbenazine to treat dyskinetic cerebral palsy in pediatrics and adults; NBI-921352 to treat developmental and epileptic encephalopathy syndrome in pediatrics and adults; NBI-827104 to treat epileptic encephalopathy with continuous spike-and-wave during sleep; NBI-1076986 to treat movement disorders; crinecerfront to treat congenital adrenal hyperplasia in adults and children; EFMODY to treat congenital adrenal hyperplasia and adrenal insufficiency in adults; valbenazine for the adjunctive treatment of schizophrenia; NBI-1065845 for the treatment of inadequate response to treatment in major depressive disorder; luvadaxistat to treat cognitive impairment related to schizophrenia; NBI-1117568 for the treatment of schizophrenia; NBI-1070770 to treat major depressive disorder; NBI-1117570 for the treatment of symptoms of psychosis and cognition in neurological and neuropsychiatric conditions; and NBI-1117569, NBI-1117567, and NBI-1065890 to treat CNS indications. The company also has license and collaboration agreements with Heptares Therapeutics Limited; Takeda Pharmaceutical Company Limited; Idorsia Pharmaceuticals Ltd; Xenon Pharmaceuticals Inc.; Voyager Therapeutics, Inc.; BIAL Portela & Ca, S.A.; Mitsubishi Tanabe Pharma Corporation; and AbbVie Inc. The company was incorporated in 1992 and is headquartered in San Diego, California.

About Amneal Pharmaceuticals

Amneal Pharmaceuticals, Inc., together with its subsidiaries, develops, manufactures, markets, and distributes generics, injectables, biosimilars, and specialty branded pharmaceutical products worldwide. The company operates through three segments: Generics, Specialty, and AvKARE. The Generics segment offers immediate and extended release oral solid, powder, liquid, sterile injectable, nasal spray, inhalation and respiratory, biosimilar, ophthalmic, film, transdermal patch, and topical products. The Specialty segment develops, promotes, sells, and distributes pharmaceutical products with focus on central nervous system disorders, including Parkinson's disease, and endocrine disorders. This segment also provides Rytary, an oral capsule formulation of carbidopa-levodopa to treat Parkinson's disease, post-encephalitic parkinsonism, and parkinsonism; Unithroid for the treatment of hypothyroidism; and IPX203, a pipeline product for Parkinson's disease. The AvKARE segment offers pharmaceuticals, medical and surgical products, and services primarily to governmental agencies, the Department of Defense, and the Department of Veterans Affairs. This segment also distributes bottle and unit dose pharmaceuticals under the AvKARE and AvPAK names; and packages and distributes pharmaceuticals and vitamins to its retail and institutional customers. It sells its products through wholesalers, distributors, hospitals, chain pharmacies, and individual pharmacies. The company was formerly known as Atlas Holdings, Inc. and changed its name to Amneal Pharmaceuticals, Inc. in 2018. Amneal Pharmaceuticals, Inc. was founded in 2002 and is headquartered in Bridgewater, New Jersey.