pSivida (NASDAQ: PSDV) and Versartis (NASDAQ:VSAR) are both small-cap healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Earnings and Valuation
This table compares pSivida and Versartis’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|pSivida||$7.54 million||7.44||-$18.48 million||($0.46)||-2.70|
Institutional & Insider Ownership
9.7% of pSivida shares are owned by institutional investors. Comparatively, 49.2% of Versartis shares are owned by institutional investors. 3.5% of pSivida shares are owned by company insiders. Comparatively, 10.9% of Versartis shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares pSivida and Versartis’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations for pSivida and Versartis, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
pSivida currently has a consensus target price of $7.57, indicating a potential upside of 510.60%. Versartis has a consensus target price of $7.22, indicating a potential upside of 207.33%. Given pSivida’s stronger consensus rating and higher possible upside, analysts plainly believe pSivida is more favorable than Versartis.
Volatility and Risk
pSivida has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Versartis has a beta of 2.35, indicating that its stock price is 135% more volatile than the S&P 500.
pSivida Corp. develops drug delivery products primarily for the treatment of chronic eye diseases. The Company operates through the biotechnology sector segment. The Company has developed three products for treatment of back-of-the-eye diseases, which include Medidur for posterior segment uveitis, its lead product candidate that is in pivotal Phase III clinical trials; ILUVIEN for diabetic macular edema (DME), its lead licensed product that is sold in the United States and European Union (EU) countries, and Retisert. Medidur is designed to treat chronic non-infectious uveitis affecting the posterior segment of the eye (posterior segment uveitis). ILUVIEN is an injectable micro-insert that provides treatment of DME from a single injection. Retisert is an implant that provides treatment of posterior segment uveitis. Its product development program is focused on utilizing its two technology platforms, Durasert and Tethadur, to deliver drugs and biologics to treat chronic diseases.
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.
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