ZIOPHARM Oncology (NASDAQ: ZIOP) and NovoCure Limited (NASDAQ:NVCR) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Institutional & Insider Ownership

41.9% of ZIOPHARM Oncology shares are held by institutional investors. Comparatively, 36.8% of NovoCure Limited shares are held by institutional investors. 10.4% of ZIOPHARM Oncology shares are held by company insiders. Comparatively, 16.7% of NovoCure Limited shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares ZIOPHARM Oncology and NovoCure Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ZIOPHARM Oncology -789.28% N/A -45.35%
NovoCure Limited -75.91% -69.48% -34.71%

Volatility and Risk

ZIOPHARM Oncology has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500. Comparatively, NovoCure Limited has a beta of 4.42, indicating that its share price is 342% more volatile than the S&P 500.

Earnings & Valuation

This table compares ZIOPHARM Oncology and NovoCure Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ZIOPHARM Oncology $6.39 million 136.67 -$48.70 million ($0.50) -12.42
NovoCure Limited $125.17 million 14.68 -$69.14 million ($1.10) -18.77

ZIOPHARM Oncology has higher revenue, but lower earnings than NovoCure Limited. NovoCure Limited is trading at a lower price-to-earnings ratio than ZIOPHARM Oncology, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for ZIOPHARM Oncology and NovoCure Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ZIOPHARM Oncology 0 1 2 0 2.67
NovoCure Limited 0 1 6 0 2.86

ZIOPHARM Oncology currently has a consensus price target of $16.50, suggesting a potential upside of 165.70%. NovoCure Limited has a consensus price target of $20.14, suggesting a potential downside of 2.46%. Given ZIOPHARM Oncology’s higher probable upside, equities analysts plainly believe ZIOPHARM Oncology is more favorable than NovoCure Limited.

Summary

NovoCure Limited beats ZIOPHARM Oncology on 7 of the 13 factors compared between the two stocks.

About ZIOPHARM Oncology

ZIOPHARM Oncology, Inc. is a biopharmaceutical company, which is seeking to develop, acquire and commercialize, on its own or with partners, a portfolio of cancer therapies that address unmet medical needs. The Company is focused on developing products in immuno-oncology that employ gene expression, control and cell technologies to deliver cell- and viral-based therapies for the treatment of cancer and graft-versus-host-disease. It has developed an adenoviral vector, Ad-RTS-IL-12, which is administered intra-tumorally under the control of the RheoSwitch Therapeutic System (RTS) expression platform. Its initial clinical stage product candidate, which is being developed using the immuno-oncology platform is Ad-RTS-IL-12 + veledimex. Ad-RTS-IL-12 + veledimex uses its gene delivery system to produce interleukin-12. As of December 31, 2016, it had completed two Phase II studies evaluating Ad-RTS-IL-12 + veledimex, for the treatment of metastatic melanoma and metastatic breast cancer.

About NovoCure Limited

NovoCure Limited is a commercial-stage oncology company. The Company is engaged in developing a cancer treatment centered on a therapy called TTFields, the use of electric fields tuned to specific frequencies to disrupt solid tumor cancer cell division. Its TTFields delivery system is used for the treatment of glioblastoma (GBM) and to advance programs testing of TTFields in multiple solid tumor indications through its clinical pipeline. In addition to its clinical and commercial progress in GBM, it is planning or conducting clinical trials evaluating the use of TTFields in brain metastases, non-small-cell lung cancer (NSCLC), pancreatic cancer, ovarian cancer and mesothelioma. TTFields are delivered through a portable, medical device. The complete delivery system, which is designed to allow patients to go about their daily activities while receiving continuous cancer treatment, includes a portable electric field generator, transducer arrays, rechargeable batteries and accessories.

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