Medivation (NASDAQ: MDVN) and Intercept Pharmaceuticals (NASDAQ:ICPT) are both healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Insider & Institutional Ownership

87.6% of Medivation shares are held by institutional investors. Comparatively, 83.1% of Intercept Pharmaceuticals shares are held by institutional investors. 3.5% of Medivation shares are held by company insiders. Comparatively, 9.2% of Intercept Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Medivation has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Intercept Pharmaceuticals has a beta of -2.01, indicating that its share price is 301% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Medivation and Intercept Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medivation 0 9 2 0 2.18
Intercept Pharmaceuticals 1 4 10 0 2.60

Medivation currently has a consensus price target of $80.71, suggesting a potential downside of 0.89%. Intercept Pharmaceuticals has a consensus price target of $213.31, suggesting a potential upside of 104.95%. Given Intercept Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts plainly believe Intercept Pharmaceuticals is more favorable than Medivation.

Profitability

This table compares Medivation and Intercept Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medivation -195.92% -225.98% -108.55%
Intercept Pharmaceuticals -543.35% -135.24% -54.37%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Medivation N/A N/A N/A ($1.10) -74.04
Intercept Pharmaceuticals $70.92 million 36.83 -$361.26 million ($15.50) -6.71

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

Summary

Intercept Pharmaceuticals beats Medivation on 7 of the 11 factors compared between the two stocks.

Medivation Company Profile

Medivation, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of therapies to treat serious diseases for which there are limited treatment options. The Company, in collaboration with Astellas Pharma, Inc. (Astellas), has one commercial product, XTANDI (enzalutamide) capsules (XTANDI). XTANDI has received marketing approval in the United States, Europe and other countries across the world for the treatment of patients with metastatic castration-resistant prostate cancer (mCRPC) and in Japan for the treatment of patients with castration-resistant prostate cancer (CRPC). The Company, in collaboration with Astellas, is also conducting investigational studies of enzalutamide in prostate cancer and in advanced breast cancer. It has developed a small molecule inhibitor of the sterol regulatory element-binding protein, or SREBP, pathway which it refers to as MDV4463.

Intercept Pharmaceuticals Company Profile

Intercept Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of therapeutics to treat non-viral, progressive liver diseases. The Company’s product candidates have the potential to treat orphan and more prevalent diseases for which there are limited therapeutic solutions. The Company’s product candidate, obeticholic acid (OCA), is a bile acid analog, a chemical substance that has a structure based on a naturally occurring human bile acid that selectively binds to and activates the farnesoid X receptor (FXR). In addition to OCA, it is developing other bile acid analog compounds targeting FXR and a second dedicated bile acid receptor called TGR5, which is a target of interest for the treatment of type 2 diabetes and other gastrointestinal indications. The Company is also developing other products INT-767 for the treatment of fibrosis and INT-777 for the treatment of type 2 diabetes.

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