Contrasting Zentalis Pharmaceuticals (NASDAQ:ZNTL) & Johnson & Johnson (NYSE:JNJ)

Johnson & Johnson (NYSE:JNJ) and Zentalis Pharmaceuticals (NASDAQ:ZNTL) are both healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.

Volatility & Risk

Johnson & Johnson has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500. Comparatively, Zentalis Pharmaceuticals has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500.

Valuation and Earnings

This table compares Johnson & Johnson and Zentalis Pharmaceuticals”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson & Johnson	$94.19 billion	6.49	$26.80 billion	$8.63	29.37
Zentalis Pharmaceuticals	$67.43 million	2.47	-$137.06 million	($1.95)	-1.19

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

Insider & Institutional Ownership

69.6% of Johnson & Johnson shares are held by institutional investors. 0.2% of Johnson & Johnson shares are held by insiders. Comparatively, 3.8% of Zentalis Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Johnson & Johnson and Zentalis Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Johnson & Johnson	16.20%	31.54%	13.00%
Zentalis Pharmaceuticals	N/A	-70.18%	-51.46%

Analyst Ratings

This is a summary of recent ratings for Johnson & Johnson and Zentalis Pharmaceuticals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson & Johnson	0	6	18	1	2.80
Zentalis Pharmaceuticals	1	3	6	1	2.64

Johnson & Johnson presently has a consensus price target of $273.61, indicating a potential upside of 7.94%. Zentalis Pharmaceuticals has a consensus price target of $7.50, indicating a potential upside of 223.28%. Given Zentalis Pharmaceuticals’ higher probable upside, analysts clearly believe Zentalis Pharmaceuticals is more favorable than Johnson & Johnson.

Summary

Johnson & Johnson beats Zentalis Pharmaceuticals on 11 of the 14 factors compared between the two stocks.

About Johnson & Johnson

Johnson & Johnson is a holding company, which engages in the research, development, manufacture, and sale of products in the healthcare field. It operates through the Innovative Medicine and MedTech segments. The Innovative Medicine segment focuses on immunology, infectious diseases, neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The MedTech segment includes a portfolio of products used in the interventional solutions, orthopaedics, surgery, and vision categories. The company was founded by Robert Wood Johnson I, James Wood Johnson, and Edward Mead Johnson Sr. in 1887 and is headquartered in New Brunswick, NJ.

About Zentalis Pharmaceuticals

Zentalis Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on discovering and developing small molecule therapeutics for the treatment of various cancers. Its products candidatures include the ZN-c3, an inhibitor of WEE1, a protein tyrosine kinase for the treatment of inhibitor for advanced solid tumors and hematological malignancies; in Phase 2 clinical trial as a monotherapy for the treatment of uterine serous carcinoma indications; Phase 2 clinical trial in Cyclin E1 driven high-grade serous ovarian cancer, fallopian tube, or primary peritoneal cancer; Phase 1/2 clinical trial in combination with PARPi for platinum-resistant ovarian cancer; Phase 1b clinical trial in combination with chemotherapy in platinum-resistant ovarian, and peritoneal or fallopian tube cancer; Phase 1/2 clinical trial in combination with chemotherapy in relapsed or refractory osteosarcoma; Phase 1/2 clinical trial with encorafenib and cetuximab for mutant metastatic colorectal cancer; and Phase 1/2 clinical trial in combination with chemotherapy in pancreatic cancer. The company's products pipeline also includes ZN-d5, an oral small molecule inhibitor of B-cell lymphoma 2, for hematological malignancies and related disorders; and BCL-xL heterobifunctional degrader, a member of the anti-apoptotic BCL-2 proteins, for solid tumors and hematological malignancies. Zentalis Pharmaceuticals, Inc. has licensing agreements and strategic collaborations with Recurium IP Holdings, LLC; Pfizer, Inc.; Zentera Therapeutics; Dana-Farber; and GlaxoSmithKline plc. The company was incorporated in 2014 and is headquartered in New York, New York.