Rhythm Pharmaceuticals (NASDAQ:RYTM) and Akebia Therapeutics (NASDAQ:AKBA) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Earnings and Valuation

This table compares Rhythm Pharmaceuticals and Akebia Therapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rhythm Pharmaceuticals N/A N/A -$74.06 million ($2.39) -11.38
Akebia Therapeutics $207.74 million 4.21 -$143.59 million ($2.44) -3.06

Rhythm Pharmaceuticals has higher earnings, but lower revenue than Akebia Therapeutics. Rhythm Pharmaceuticals is trading at a lower price-to-earnings ratio than Akebia Therapeutics, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Rhythm Pharmaceuticals has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, Akebia Therapeutics has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.

Insider and Institutional Ownership

92.0% of Rhythm Pharmaceuticals shares are owned by institutional investors. 4.9% of Rhythm Pharmaceuticals shares are owned by company insiders. Comparatively, 8.2% of Akebia Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Rhythm Pharmaceuticals and Akebia Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rhythm Pharmaceuticals N/A -31.72% -30.57%
Akebia Therapeutics -69.12% -49.78% -25.18%

Analyst Ratings

This is a summary of recent recommendations for Rhythm Pharmaceuticals and Akebia Therapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rhythm Pharmaceuticals 0 1 4 0 2.80
Akebia Therapeutics 0 2 4 0 2.67

Rhythm Pharmaceuticals presently has a consensus target price of $39.40, suggesting a potential upside of 44.80%. Akebia Therapeutics has a consensus target price of $15.14, suggesting a potential upside of 102.99%. Given Akebia Therapeutics’ higher probable upside, analysts clearly believe Akebia Therapeutics is more favorable than Rhythm Pharmaceuticals.

Rhythm Pharmaceuticals Company Profile

Rhythm Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapeutics for the treatment of rare genetic disorders that result in life-threatening metabolic disorders. The company's lead product candidate is setmelanotide, a melanocortin-4 receptor agonist peptide, which is in Phase III clinical trials to treat pro-opiomelanocortin (POMC) and leptin receptor deficiency obesity, and Bardet-Biedl and Alström syndrome; and is in Phase II clinical trials for treating POMC heterozygous deficiency obesity and POMC epigenetic disorders. It is also developing RM-853, an orally available ghrelin o-acyltransferase inhibitor that is in preclinical development for Prader-Willi syndrome. The company was formerly known as Rhythm Metabolic, Inc. and changed its name to Rhythm Pharmaceuticals, Inc. in October 2015. Rhythm Pharmaceuticals, Inc. was founded in 2008 and is headquartered in Boston, Massachusetts.

Akebia Therapeutics Company Profile

Akebia Therapeutics, Inc., a biopharmaceutical company, focuses on the development and commercialization of novel therapeutics for patients with renal disease through hypoxia-inducible factor (HIF) biology. Its lead product candidate is vadadustat, an oral therapy, which is in Phase III development for the treatment of anemia due to chronic kidney disease in dialysis and non-dialysis patients. The company is also developing a HIF-based portfolio of product candidates, such as AKB-5169, a preclinical compound for the treatment of inflammatory bowel disease. Akebia Therapeutics, Inc. has collaboration agreements with Otsuka Pharmaceutical Co. Ltd. for the development and commercialization of vadadustat in the United States, European Union, Russia, China, Australia, Canada, the Middle East, and other countries; and Mitsubishi Tanabe Pharma Corporation for the development and commercialization of vadadustat in Japan and other Asian countries, as well as research and license agreement with Janssen Pharmaceutica NV for the development and commercialization of HIF-prolyl hydroxylases-targeted compounds internationally. The company was founded in 2007 and is headquartered in Cambridge, Massachusetts.

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