Enanta Pharmaceuticals (ENTA) versus ShangPharma (SHP) Critical Review

Enanta Pharmaceuticals (NASDAQ: ENTA) and ShangPharma (NYSE:SHP) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Insider and Institutional Ownership

66.9% of Enanta Pharmaceuticals shares are held by institutional investors. 9.3% of Enanta Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Enanta Pharmaceuticals and ShangPharma’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enanta Pharmaceuticals $102.81 million 12.53 $17.71 million $0.80 84.15
ShangPharma N/A N/A N/A $0.32 N/A

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

Profitability

This table compares Enanta Pharmaceuticals and ShangPharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enanta Pharmaceuticals 17.23% 6.46% 6.11%
ShangPharma N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Enanta Pharmaceuticals and ShangPharma, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enanta Pharmaceuticals 0 2 2 0 2.50
ShangPharma 0 0 0 0 N/A

Enanta Pharmaceuticals currently has a consensus price target of $45.25, suggesting a potential downside of 32.78%.

Summary

Enanta Pharmaceuticals beats ShangPharma on 8 of the 8 factors compared between the two stocks.

Enanta Pharmaceuticals Company Profile

Enanta Pharmaceuticals, Inc. is a research and development-focused biotechnology company. The Company uses chemistry-driven approach and drug discovery solutions to create small molecule drugs for the treatment of viral infections and liver diseases. Its research and development programs are focused on three disease targets: non-alcoholic steatohepatitis (NASH)/ primary biliary cholangitis (PBC), respiratory syncytial virus (RSV) and hepatitis B virus (HBV). It has discovered novel protease inhibitors that are members of the direct-acting-antiviral (DAA) inhibitor classes designed for use against the hepatitis C virus (HCV). These protease inhibitors, developed through its collaboration with AbbVie Inc. (AbbVie), include paritaprevir and glecaprevir (ABT-493). Its product candidates also include EDP-305, which is a farnesoid X receptor (FXR) agonist product candidate for NASH and PBC, and EDP-938, which is a clinical candidate for RSV.

ShangPharma Company Profile

ShangPharma Corporation (ShangPharma) is a China-based holding company. The Company is a pharmaceutical and biotechnology research and development (R&D) outsourcing company. It provides a range of high-quality, integrated services across the drug discovery and development process to international and Chinese pharmaceutical and biotechnology companies. Its services consist of discovery chemistry, discovery biology and preclinical development, pharmaceutical development and biologics services. It has a diversified and loyal global customer base. In March 2013, the Company completed the merger contemplated by the previously announced Agreement and Plan of Merger (the Merger Agreement), by and among the Company, ShangPharma Holdings Limited (Holdings), ShangPharma Parent Limited (Parent) and ShangPharma Merger Sub Limited (Merger Sub). As a result of the merger, the Company became a wholly owned subsidiary of Parent.

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