Summit Therapeutics (NASDAQ: SMMT) and Flex Pharma (NASDAQ:FLKS) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.
Insider and Institutional Ownership
30.0% of Summit Therapeutics shares are owned by institutional investors. Comparatively, 27.3% of Flex Pharma shares are owned by institutional investors. 45.4% of Flex Pharma shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summit Therapeutics has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Flex Pharma has a beta of 3.59, meaning that its stock price is 259% more volatile than the S&P 500.
This table compares Summit Therapeutics and Flex Pharma’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent recommendations for Summit Therapeutics and Flex Pharma, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Summit Therapeutics currently has a consensus target price of $24.50, indicating a potential upside of 92.91%. Flex Pharma has a consensus target price of $10.80, indicating a potential upside of 181.98%. Given Flex Pharma’s higher probable upside, analysts clearly believe Flex Pharma is more favorable than Summit Therapeutics.
Earnings & Valuation
This table compares Summit Therapeutics and Flex Pharma’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Summit Therapeutics||$2.90 million||60.61||-$28.59 million||($0.10)||-127.00|
|Flex Pharma||$1.01 million||68.14||-$39.49 million||($2.02)||-1.90|
Summit Therapeutics has higher revenue and earnings than Flex Pharma. Summit Therapeutics is trading at a lower price-to-earnings ratio than Flex Pharma, indicating that it is currently the more affordable of the two stocks.
Summit Therapeutics beats Flex Pharma on 8 of the 12 factors compared between the two stocks.
About Summit Therapeutics
Summit Therapeutics plc is a biopharmaceutical company, which is engaged in drug development. The Company is focused on the discovery, development and commercialization of medicines for indications for which there are no existing or only inadequate therapies. It is conducting clinical programs focused on the genetic disease Duchenne muscular dystrophy (DMD) and the infectious disease Clostridium difficile infection (CDI). Its lead DMD product candidate is ezutromid, which is an orally administered small molecule. Its lead CDI product candidate is ridinilazole, which is an orally administered small molecule antibiotic. Its Ridinilazole is in Phase II clinical trials. It has conducted over three Phase I clinical trials of ezutromid. Its DMD program is based on utrophin modulation. It has received an orphan drug designation to ezutromid for the treatment of DMD. It is also developing an earlier-stage pipeline of second and future generation utrophin modulators for the treatment of DMD.
About Flex Pharma
Flex Pharma, Inc. is a biotechnology company. The Company develops treatments for nocturnal leg cramps, muscle cramps and spasms associated with severe neuromuscular conditions, and exercise associated muscle cramps (EAMCs). The Company’s product candidates activate certain receptors in primary sensory neurons, which then act through neuronal circuits to reduce the repetitive firing, or hyperexcitability, of alpha-motor neurons in the spinal cord, thereby preventing or reducing the frequency and intensity of muscle cramps and spasms. The Company operates through developing and commercializing products for nocturnal leg cramps, muscle cramps, spasms and spasticity associated with severe neuromuscular conditions, and exercise-associated muscle cramps segment. The Company’s lead drug product candidate is FLX-787, which is in the Phase II clinical trial stage. It is developing a consumer brand and products specifically formulated to treat athletes suffering from EAMCs.
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