Lion Biotechnologies (NASDAQ: IOVA) and Invitae Corporation (NYSE:NVTA) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, analyst recommendations, institutional ownership and earnings.

Analyst Ratings

This is a summary of recent recommendations and price targets for Lion Biotechnologies and Invitae Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lion Biotechnologies 0 0 10 0 3.00
Invitae Corporation 0 0 3 0 3.00

Lion Biotechnologies presently has a consensus target price of $15.31, suggesting a potential upside of 73.02%. Invitae Corporation has a consensus target price of $14.33, suggesting a potential upside of 65.70%. Given Lion Biotechnologies’ higher probable upside, equities research analysts plainly believe Lion Biotechnologies is more favorable than Invitae Corporation.

Profitability

This table compares Lion Biotechnologies and Invitae Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lion Biotechnologies N/A -53.59% -51.25%
Invitae Corporation -206.95% -115.25% -67.79%

Earnings and Valuation

This table compares Lion Biotechnologies and Invitae Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Lion Biotechnologies N/A N/A -$52.89 million ($1.30) -6.81
Invitae Corporation $25.05 million 18.28 -$100.25 million ($2.56) -3.38

Lion Biotechnologies has higher revenue, but lower earnings than Invitae Corporation. Lion Biotechnologies is trading at a lower price-to-earnings ratio than Invitae Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

65.6% of Lion Biotechnologies shares are held by institutional investors. Comparatively, 59.2% of Invitae Corporation shares are held by institutional investors. 13.2% of Lion Biotechnologies shares are held by insiders. Comparatively, 9.9% of Invitae Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Lion Biotechnologies has a beta of 4.57, suggesting that its share price is 357% more volatile than the S&P 500. Comparatively, Invitae Corporation has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Summary

Lion Biotechnologies beats Invitae Corporation on 10 of the 11 factors compared between the two stocks.

About Lion Biotechnologies

Iovance Biotherapeutics, Inc., formerly Lion Biotechnologies, Inc., is a clinical-stage biopharmaceutical company. The Company is focused on the development and commercialization of cancer immunotherapy products designed to harness the power of a patient’s own immune system to eradicate cancer cells. The Company’s lead program is an adoptive cell therapy utilizing tumor-infiltrating lymphocytes, which are T cells derived from patients’ tumors, for the treatment of metastatic melanoma. As of December 31, 2016, it had an on-going Phase II clinical trial of its lead product candidate, LN-144, TIL for the treatment of metastatic melanoma. The Company is developing LN-145 to treat cervical and head and neck cancers. It is collaborating with the National Cancer Institute to evaluate unmodified TIL in other solid tumor indications, such as ocular melanoma, bladder, breast and lung cancer. It is collaborating with the NCI to evaluate TIL in combination with the checkpoint inhibitor, Keytruda.

About Invitae Corporation

Invitae Corporation utilizes an integrated portfolio of laboratory processes, software tools and informatics capabilities to process deoxyribonucleic acid (DNA)-containing samples, analyze information about patient-specific genetic variation and generate test reports for clinicians and their patients. As of December 31, 2016, the Company’s products consisted of assays totaling over 1,100 genes that could be used for multiple indications, including hereditary cancer, neurological disorders, cardiovascular disorders, pediatric disorders and other hereditary conditions. The Company offers panels for a range of hereditary conditions in cancer, cardiology, neuromuscular, pediatric and rare diseases. The Company focuses on genetic testing, genome network and genome management. The Company offers full gene sequencing and deletion/duplication analysis as a standard for all of its tests. The Company holds interests in AltaVoice, a patient-centered data company.

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