Check-Cap (NASDAQ: CHEK) and Supernus Pharmaceuticals (NASDAQ:SUPN) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Check-Cap and Supernus Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Check-Cap N/A -98.88% -80.97%
Supernus Pharmaceuticals 41.10% 30.73% 19.48%

Insider and Institutional Ownership

13.4% of Check-Cap shares are held by institutional investors. Comparatively, 92.8% of Supernus Pharmaceuticals shares are held by institutional investors. 6.7% of Supernus Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Check-Cap and Supernus Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Check-Cap 0 0 3 0 3.00
Supernus Pharmaceuticals 0 2 4 0 2.67

Check-Cap presently has a consensus target price of $6.00, indicating a potential upside of 242.86%. Supernus Pharmaceuticals has a consensus target price of $48.33, indicating a potential upside of 11.11%. Given Check-Cap’s stronger consensus rating and higher possible upside, analysts clearly believe Check-Cap is more favorable than Supernus Pharmaceuticals.

Risk and Volatility

Check-Cap has a beta of -0.37, indicating that its share price is 137% less volatile than the S&P 500. Comparatively, Supernus Pharmaceuticals has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Valuation & Earnings

This table compares Check-Cap and Supernus Pharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Check-Cap N/A N/A -$9.62 million ($0.59) -2.97
Supernus Pharmaceuticals $252.59 million 8.73 $82.36 million $1.95 22.31

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

Summary

Supernus Pharmaceuticals beats Check-Cap on 10 of the 12 factors compared between the two stocks.

Check-Cap Company Profile

Check-Cap Ltd. (Check-Cap) is a clinical-stage medical diagnostics company. The Company is engaged in the development of an ingestible imaging capsule that utilizes low-dose X-rays for the detection and imaging of colonic polyps and colorectal cancers, or CRC. The Company’s system consists of main components, such as ingestible scanning capsule; Capsule Positioning System (CPS), a recorder worn on the patient’s back, and a personal computer (PC)-based work station for data reconstruction and image processing. The Company’s scanning capsule will be swallowed and propelled by natural motility through the gastrointestinal tract and excreted naturally with no need for retrieval for data collection. Its scanning capsule employs low-dose X-rays, which allow the system to image the interior lining of the colon even when surrounded by intestinal content. Its capsule transmits information to a receiving device worn on the patient’s body that stores the information for off-line analysis.

Supernus Pharmaceuticals Company Profile

Supernus Pharmaceuticals, Inc. is a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system diseases. The Company offers Oxtellar XR (extended-release oxcarbazepine) and Trokendi XR (extended-release topiramate), its two treatments for patients with epilepsy. In addition, it is developing multiple product candidates in psychiatry to address unmet medical needs and market opportunities for the treatment of impulsive aggression (IA) and for the treatment of attention deficit hyperactivity disorder (ADHD). It is developing SPN-810 (molindone hydrochloride) to treat IA in patients having ADHD. It is developing SPN-812 (viloxazine hydrochloride) as a candidate to treat patients having ADHD. The Company’s neurology portfolio consists of Oxtellar XR and Trokendi XR, which are the first once-daily extended release oxcarbazepine and topiramate products, respectively, indicated for epilepsy in the United States market.

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