pSivida (NASDAQ: PSDV) and Versartis (NASDAQ:VSAR) are both small-cap healthcare companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Valuation and Earnings

This table compares pSivida and Versartis’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
pSivida $7.54 million 7.56 -$18.48 million ($0.46) -2.74
Versartis N/A N/A -$95.81 million ($3.92) -0.50

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for pSivida and Versartis, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
pSivida 0 0 6 0 3.00
Versartis 0 7 3 0 2.30

pSivida presently has a consensus price target of $8.00, indicating a potential upside of 534.92%. Versartis has a consensus price target of $7.22, indicating a potential upside of 270.37%. Given pSivida’s stronger consensus rating and higher possible upside, research analysts clearly believe pSivida is more favorable than Versartis.

Risk and Volatility

pSivida has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Versartis has a beta of 2.31, meaning that its share price is 131% more volatile than the S&P 500.

Institutional and Insider Ownership

9.7% of pSivida shares are owned by institutional investors. Comparatively, 49.2% of Versartis shares are owned by institutional investors. 3.5% of pSivida shares are owned by insiders. Comparatively, 10.9% of Versartis shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares pSivida and Versartis’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
pSivida -226.31% -139.56% -99.99%
Versartis N/A -131.09% -79.18%

About pSivida

pSivida Corp. develops drug delivery products primarily for the treatment of chronic eye diseases. The Company operates through the biotechnology sector segment. The Company has developed three products for treatment of back-of-the-eye diseases, which include Medidur for posterior segment uveitis, its lead product candidate that is in pivotal Phase III clinical trials; ILUVIEN for diabetic macular edema (DME), its lead licensed product that is sold in the United States and European Union (EU) countries, and Retisert. Medidur is designed to treat chronic non-infectious uveitis affecting the posterior segment of the eye (posterior segment uveitis). ILUVIEN is an injectable micro-insert that provides treatment of DME from a single injection. Retisert is an implant that provides treatment of posterior segment uveitis. Its product development program is focused on utilizing its two technology platforms, Durasert and Tethadur, to deliver drugs and biologics to treat chronic diseases.

About Versartis

Versartis, Inc. is an endocrine-focused biopharmaceutical company. The Company is engaged in developing a long-acting form of recombinant human growth hormone, somavaratan (VRS-317), for growth hormone deficiency (GHD), an orphan disease. The Company’s first indication for somavaratan is pediatric GHD. The Company may develop somavaratan for additional growth disorders, such as idiopathic short stature (ISS), small for gestational age (SGA) and Turner Syndrome. Somavaratan is engineered using XTEN technology to extend the residence time in the bloodstream by reducing the clearance of recombinant human growth hormone (rhGH) from the body by the two primary mechanisms, kidney filtration and receptor mediated clearance.

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