Inovio Pharmaceuticals (NASDAQ: INO) and Novavax (NASDAQ:NVAX) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Insider & Institutional Ownership

24.8% of Inovio Pharmaceuticals shares are owned by institutional investors. Comparatively, 45.2% of Novavax shares are owned by institutional investors. 10.6% of Inovio Pharmaceuticals shares are owned by insiders. Comparatively, 4.0% of Novavax shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Inovio Pharmaceuticals and Novavax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inovio Pharmaceuticals -153.46% -63.67% -46.77%
Novavax -660.50% N/A -49.73%

Risk & Volatility

Inovio Pharmaceuticals has a beta of 2.75, suggesting that its share price is 175% more volatile than the S&P 500. Comparatively, Novavax has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Inovio Pharmaceuticals and Novavax, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inovio Pharmaceuticals 0 2 7 0 2.78
Novavax 0 6 2 0 2.25

Inovio Pharmaceuticals presently has a consensus target price of $22.11, suggesting a potential upside of 272.55%. Novavax has a consensus target price of $2.85, suggesting a potential upside of 158.75%. Given Inovio Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts clearly believe Inovio Pharmaceuticals is more favorable than Novavax.

Valuation & Earnings

This table compares Inovio Pharmaceuticals and Novavax’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Inovio Pharmaceuticals $51.84 million 10.33 -$70.60 million ($1.08) -5.50
Novavax $21.04 million 15.38 -$186.64 million ($0.77) -1.43

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

Summary

Inovio Pharmaceuticals beats Novavax on 9 of the 13 factors compared between the two stocks.

Inovio Pharmaceuticals Company Profile

Inovio Pharmaceuticals, Inc. (Inovio) is a clinical-stage pharmaceutical company, which is involved in developing deoxyribonucleic acid (DNA) immunotherapies and vaccines focused on treating and preventing cancers and infectious diseases. The Company’s DNA-based immunotherapies, in combination with its electroporation delivery devices, generates immune responses, in particular T cells, in the body to fight target diseases. It has completed, current or planned clinical programs of its SynCon immunotherapies for human papillomavirus (HPV)-caused pre-cancers and cancers, influenza, prostate cancer, breast/lung/pancreatic cancer, hepatitis C virus (HCV), hepatitis B virus (HBV), human immunodeficiency virus (HIV), Ebola, Middle East Respiratory Syndrome (MERS) and Zika virus. With its immunotherapy platform, as well as with its CELLECTRA electroporation delivery technology, it has a pipeline of pre-clinical and clinical stage products that have generated in vivo immune responses.

Novavax Company Profile

Novavax, Inc. is a clinical-stage vaccine company focused on the discovery, development and commercialization of recombinant nanoparticle vaccines and adjuvants. The Company operates through developing recombinant vaccines segment. The Company, through its recombinant nanoparticle vaccine technology, produces vaccine candidates to respond to both known and newly emerging diseases. The Company’s product pipeline focuses on a range of infectious diseases with vaccine candidates in clinical development for respiratory syncytial virus (RSV), seasonal influenza, pandemic influenza and the Ebola virus (EBOV). The Company’s lead adjuvant for human applications, Matrix-M, is in a Phase I/II clinical trial for pandemic influenza H7N9 vaccine candidate. It is also testing Matrix-M in conjunction with its EBOV vaccine candidate in a Phase I clinical trial. It is developing additional pre-clinical stage programs in a range of infectious diseases, including Middle East respiratory syndrome (MERS).

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