Puma Biotechnology (NASDAQ:PBYI) versus Lexicon Pharmaceuticals (NASDAQ:LXRX) Financial Contrast

Puma Biotechnology (NASDAQ:PBYI) and Lexicon Pharmaceuticals (NASDAQ:LXRX) are both small-cap healthcare companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Valuation & Earnings

This table compares Puma Biotechnology and Lexicon Pharmaceuticals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Puma Biotechnology	$228.40 million	2.22	$31.11 million	$0.52	18.92
Lexicon Pharmaceuticals	$49.80 million	16.26	-$50.34 million	($0.15)	-12.13

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

Insider & Institutional Ownership

61.3% of Puma Biotechnology shares are owned by institutional investors. Comparatively, 74.7% of Lexicon Pharmaceuticals shares are owned by institutional investors. 22.2% of Puma Biotechnology shares are owned by company insiders. Comparatively, 14.0% of Lexicon Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Puma Biotechnology and Lexicon Pharmaceuticals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Puma Biotechnology	0	2	0	0	2.00
Lexicon Pharmaceuticals	1	1	3	0	2.40

Puma Biotechnology presently has a consensus target price of $6.00, indicating a potential downside of 39.02%. Lexicon Pharmaceuticals has a consensus target price of $5.70, indicating a potential upside of 213.19%. Given Lexicon Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts clearly believe Lexicon Pharmaceuticals is more favorable than Puma Biotechnology.

Profitability

This table compares Puma Biotechnology and Lexicon Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Puma Biotechnology	11.50%	20.76%	13.22%
Lexicon Pharmaceuticals	-147.38%	-37.53%	-24.96%

Volatility & Risk

Puma Biotechnology has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500. Comparatively, Lexicon Pharmaceuticals has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Summary

Puma Biotechnology beats Lexicon Pharmaceuticals on 9 of the 14 factors compared between the two stocks.

About Puma Biotechnology

Puma Biotechnology, Inc., a biopharmaceutical company, focuses on the development and commercialization of products to enhance cancer care in the United States and internationally. The company offers NERLYNX, an oral version of neratinib that is used to treat adult patients with early stage HER2-overexpressed/amplified breast cancer; and advanced or metastatic HER2-positive breast cancer when combined with capecitabine. It also develops alisertib, a small molecule inhibitor of aurora kinase A for the treatment of hormone receptor positive breast cancer, triple negative breast cancer, small cell lung cancer, and head and neck cancer. The company sells its products through specialty pharmacy and distributor networks. It has license agreements with Pfizer Inc. for the development, manufacture, and commercialization of neratinib (oral), neratinib (intravenous), PB357, and related compounds; and Takeda Pharmaceutical Company Limited for the research, development, and commercialization of alisertib, as well as sub-license agreements with Specialised Therapeutics Asia Pte Ltd., Medison Pharma Ltd., Pint Pharma International SA, Knight Therapeutics, Inc., Pierre Fabre Medicament SAS, and Bixink Therapeutics Co., Ltd. The company was founded in 2010 and is headquartered in Los Angeles, California.

About Lexicon Pharmaceuticals

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of pharmaceutical products. Its orally-delivered small molecule drug candidates under development comprise Sotagliflozin that completed Phase III clinical trials for the for the treatment of heart failure and type 1 diabetes; and LX9211, which is in Phase II clinical development for the treatment of neuropathic pain and LX2761, which is in Phase I clinical development for gastrointestinal tract. Lexicon Pharmaceuticals, Inc. has strategic collaboration and license agreements with Bristol-Myers Squibb Company and Genentech, Inc. The company was incorporated in 1995 and is headquartered in The Woodlands, Texas.