MacroGenics (NASDAQ: MGNX) and DURECT Corporation (NASDAQ:DRRX) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Risk and Volatility

MacroGenics has a beta of 2.78, suggesting that its share price is 178% more volatile than the S&P 500. Comparatively, DURECT Corporation has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500.

Earnings and Valuation

This table compares MacroGenics and DURECT Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
MacroGenics $91.88 million 7.49 -$58.52 million ($4.50) -4.15
DURECT Corporation $14.02 million 10.17 -$34.50 million ($0.15) -6.40

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

Profitability

This table compares MacroGenics and DURECT Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MacroGenics -1,526.55% -69.31% -58.09%
DURECT Corporation -62.57% -419.65% -45.77%

Insider and Institutional Ownership

84.7% of MacroGenics shares are held by institutional investors. Comparatively, 46.0% of DURECT Corporation shares are held by institutional investors. 8.3% of MacroGenics shares are held by company insiders. Comparatively, 10.3% of DURECT Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for MacroGenics and DURECT Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MacroGenics 0 2 9 0 2.82
DURECT Corporation 0 2 1 0 2.33

MacroGenics currently has a consensus target price of $31.33, suggesting a potential upside of 67.74%. DURECT Corporation has a consensus target price of $2.67, suggesting a potential upside of 177.78%. Given DURECT Corporation’s higher possible upside, analysts plainly believe DURECT Corporation is more favorable than MacroGenics.

Summary

DURECT Corporation beats MacroGenics on 7 of the 13 factors compared between the two stocks.

About MacroGenics

MacroGenics, Inc. is a clinical-stage biopharmaceutical company focused on discovering and developing monoclonal antibody-based therapeutics for the treatment of cancer, as well as various autoimmune disorders and infectious diseases. The Company develops therapeutic product candidates using its antibody-based technology platforms and also in collaboration with other biopharmaceutical companies. It has a pipeline of product candidates in human clinical testing, primarily as treatments for different types of cancers, which are created using its technology platforms. Its clinical product candidate, margetuximab, has been enhanced using its Fc Optimization platform. The Company is also developing several product candidates targeting B7-H3, a protein in the B7 family of immune regulator proteins. The Company’s product candidates also include enoblituzumab and MGD009, MGC018, MGD006 (flotetuzumab), MGD007, MGD011 (duvortuxizumab), PF-06671008 and MGD010.

About DURECT Corporation

Durect Corporation is a biopharmaceutical company with research and development programs. The Company’s products candidates include DUR-928, oral for metabolic/lipid disorders, and DUR-928, injectable for acute organ injuries. Its other product candidates include POSIMIR (controlled release injection of bupivacaine), REMOXY (oral controlled release oxycodone), ORADUR-ADHD, ELADUR (controlled release injection of bupivicane), Relday (risperidone), ORADUR-based opioid (hydromorphone) and SABER-based ophthalmic. The Company’s ALZET product line consists of miniature, implantable osmotic pumps and accessories used for experimental research in mice, rats and other laboratory animals. The Company also manufactures and sells osmotic pumps used in laboratory research and design; and develops and manufactures a range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products.

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