Ardelyx (NASDAQ:ARDX – Get Free Report) and Heron Therapeutics (NASDAQ:HRTX – Get Free Report) are both small-cap healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.
Valuation and Earnings
This table compares Ardelyx and Heron Therapeutics”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ardelyx | $407.32 million | 1.86 | -$61.60 million | ($0.22) | -13.80 |
| Heron Therapeutics | $151.18 million | 0.37 | -$20.19 million | ($0.19) | -1.55 |
Heron Therapeutics has lower revenue, but higher earnings than Ardelyx. Ardelyx is trading at a lower price-to-earnings ratio than Heron Therapeutics, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
58.9% of Ardelyx shares are held by institutional investors. Comparatively, 80.0% of Heron Therapeutics shares are held by institutional investors. 5.3% of Ardelyx shares are held by company insiders. Comparatively, 6.1% of Heron Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Ardelyx and Heron Therapeutics, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ardelyx | 1 | 1 | 9 | 1 | 2.83 |
| Heron Therapeutics | 1 | 3 | 1 | 0 | 2.00 |
Ardelyx presently has a consensus price target of $13.90, indicating a potential upside of 357.99%. Heron Therapeutics has a consensus price target of $2.00, indicating a potential upside of 580.27%. Given Heron Therapeutics’ higher probable upside, analysts clearly believe Heron Therapeutics is more favorable than Ardelyx.
Volatility & Risk
Ardelyx has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, Heron Therapeutics has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500.
Profitability
This table compares Ardelyx and Heron Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ardelyx | -12.35% | -36.00% | -10.77% |
| Heron Therapeutics | -22.52% | -293.02% | -10.00% |
Summary
Heron Therapeutics beats Ardelyx on 8 of the 15 factors compared between the two stocks.
About Ardelyx
Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.
About Heron Therapeutics
Heron Therapeutics, Inc., a commercial-stage biotechnology company, focuses on enhancing the lives of patients by developing and commercializing therapeutic that enhances medical care. The company's product candidates utilize its proprietary Biochronomer, a drug delivery technology, which delivers therapeutic levels of a range of short-acting pharmacological agents over a period from days to weeks with a single administration. It offers SUSTOL (granisetron), an extended-release injection for the prevention of acute and delayed nausea and vomiting associated with moderately emetogenic chemotherapy, or anthracycline and cyclophosphamide combination chemotherapy regimens; and CINVANTI, an intravenous formulation of aprepitant, a substance P/neurokinin-1 receptor antagonist for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cancer chemotherapy, as well as nausea and vomiting associated with moderately emetogenic cancer chemotherapy. The company is also developing ZYNRELEF, a dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of the nonsteroidal anti-inflammatory drug meloxicam; and APONVIE, an intravenous formulation of a substance P/neurokinin-1 receptor antagonist indicated for the prevention of postoperative nausea and vomiting in adults. The company was formerly known as A.P. Pharma, Inc. and changed its name to Heron Therapeutics, Inc. in January 2014. Heron Therapeutics, Inc. was founded in 1983 and is headquartered in San Diego, California.
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