Novavax (NASDAQ: NVAX) and Seattle Genetics (NASDAQ:SGEN) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Volatility & Risk

Novavax has a beta of 1.97, indicating that its share price is 97% more volatile than the S&P 500. Comparatively, Seattle Genetics has a beta of 2.39, indicating that its share price is 139% more volatile than the S&P 500.

Profitability

This table compares Novavax and Seattle Genetics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novavax -1,006.00% -787.38% -53.89%
Seattle Genetics -47.38% -32.87% -25.17%

Institutional & Insider Ownership

45.2% of Novavax shares are held by institutional investors. Comparatively, 97.6% of Seattle Genetics shares are held by institutional investors. 4.0% of Novavax shares are held by insiders. Comparatively, 34.7% of Seattle Genetics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Novavax and Seattle Genetics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novavax $21.04 million 14.82 -$186.64 million ($0.77) -1.38
Seattle Genetics $428.94 million 21.34 -$187.25 million ($1.43) -44.76

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Novavax and Seattle Genetics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novavax 0 6 2 0 2.25
Seattle Genetics 2 10 8 0 2.30

Novavax currently has a consensus target price of $3.35, indicating a potential upside of 216.04%. Seattle Genetics has a consensus target price of $60.29, indicating a potential downside of 5.82%. Given Novavax’s higher probable upside, analysts clearly believe Novavax is more favorable than Seattle Genetics.

Summary

Seattle Genetics beats Novavax on 10 of the 13 factors compared between the two stocks.

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).

Seattle Genetics Company Profile

Seattle Genetics, Inc. is a biotechnology company focused on the development and commercialization of therapies for the treatment of cancer. The Company is engaged in the development and sale of pharmaceutical products on its own behalf or in collaboration with others. The Company’s marketed product ADCETRIS, or brentuximab vedotin, is an antibody-drug conjugate (ADC). In addition to ADCETRIS, the Company’s pipeline includes other clinical-stage ADC programs, such as ASG-22ME, SGN-LIV1A, SGN-CD19A, SGN-CD19B, SGN-CD123A, SGN-352A, and ASG-15ME, as well as two immuno-oncology agents, SEA-CD40, which is based on its sugar-engineered antibody (SEA) technology, and SGN-2FF, which is a small molecule. It also has multiple preclinical and research-stage programs that employ its technologies, including SGN-CD48A and a preclinical ADC. ADCETRIS is an ADC comprising an anti-CD30 monoclonal antibody attached by a protease-cleavable linker to a microtubule disrupting agent.

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