Critical Analysis: Eagle Pharmaceuticals (EGRX) and Salix Pharmaceuticals (SLXP)

Eagle Pharmaceuticals (NASDAQ: EGRX) and Salix Pharmaceuticals (NASDAQ:SLXP) are both healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Valuation and Earnings

This table compares Eagle Pharmaceuticals and Salix Pharmaceuticals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eagle Pharmaceuticals $189.48 million 4.65 $81.45 million $6.21 9.51
Salix Pharmaceuticals N/A N/A N/A ($6.51) -26.55

Eagle Pharmaceuticals has higher revenue and earnings than Salix Pharmaceuticals. Salix Pharmaceuticals is trading at a lower price-to-earnings ratio than Eagle Pharmaceuticals, 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 Eagle Pharmaceuticals and Salix Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eagle Pharmaceuticals 1 0 2 0 2.33
Salix Pharmaceuticals 0 0 0 0 N/A

Eagle Pharmaceuticals presently has a consensus price target of $62.33, suggesting a potential upside of 5.54%. Given Eagle Pharmaceuticals’ higher probable upside, analysts plainly believe Eagle Pharmaceuticals is more favorable than Salix Pharmaceuticals.

Volatility and Risk

Eagle Pharmaceuticals has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Salix Pharmaceuticals has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Profitability

This table compares Eagle Pharmaceuticals and Salix Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eagle Pharmaceuticals 36.95% 62.60% 44.24%
Salix Pharmaceuticals -2,134.34% -305.24% -25.83%

Summary

Eagle Pharmaceuticals beats Salix Pharmaceuticals on 8 of the 8 factors compared between the two stocks.

Eagle Pharmaceuticals Company Profile

Eagle Pharmaceuticals, Inc. is a specialty pharmaceutical company. The Company focuses on developing and commercializing injectable products in the critical care and oncology areas. The Company’s product portfolio includes products, including Argatroban; Ryanodex; docetaxel injection, non-alcohol formulation; and Bendeka. Its advanced candidates include EP-3101 (bendamustine Resistance Temperature Detectors (RTD)) (EP-3101), EP-4104 (dantrolene sodium for exertional heat stroke (EHS)) (EP-4104), EGL-4104-C-1702 (dantrolene sodium for drug induced hyperthermia), EP-5101 (pemetrexed) (EP-5101) and EGL-5385-C-1701 (fulvestrant). Its product portfolio focuses on oncology, critical care and orphan diseases. Bendamustine is an alkylating agent approved for use in chronic lymphocytic leukemia (CLL), and indolent B-cell non-Hodgkin’s lymphoma (NHL), that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen.

Salix Pharmaceuticals Company Profile

Salix Pharmaceuticals, Ltd. is a specialty pharmaceutical company engaged in acquiring, developing and commercializing prescription drugs and medical devices used in the treatment of a variety of gastrointestinal disorders. The Company offers over 20 marketed products, such as XIFAXAN550 (rifaximin) tablets, XIFAXAN (rifaximin) tablets, APRISO (mesalamine) extended-release capsules, UCERIS (budesonide MMX) extended release tablets, MOVIPREP, GLUMETZA extended release tablets, RELISTOR subcutaneous injection, UCERIS rectal foam, OSMOPREP tablets, SOLESTA, DEFLUX, FULYZAQ (crofelemer) delayed-release tablets, GIAZO (balsalazide disodium) tablets, CYCLOSET (bromocriptine mesylate) tablets, and FENOGLIDE (fenofibrate) tablets, among others. Its primary product candidates under development include Rifaximin, Methylnaltrexone bromide oral, Ruconest, Rifaximin delayed release or extended intestinal release and Rifaximin soluble solid dispersion (SSD)/next generation.

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