Calithera Biosciences (NASDAQ: CALA) and Ardelyx (NASDAQ:ARDX) are both small-cap healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Profitability

This table compares Calithera Biosciences and Ardelyx’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Calithera Biosciences -71.59% -12.70% -9.51%
Ardelyx N/A -62.60% -56.57%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Calithera Biosciences and Ardelyx, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Calithera Biosciences 0 1 5 0 2.83
Ardelyx 0 0 5 0 3.00

Calithera Biosciences currently has a consensus target price of $14.40, indicating a potential downside of 10.28%. Ardelyx has a consensus target price of $15.60, indicating a potential upside of 165.53%. Given Ardelyx’s stronger consensus rating and higher possible upside, analysts clearly believe Ardelyx is more favorable than Calithera Biosciences.

Institutional and Insider Ownership

71.9% of Calithera Biosciences shares are held by institutional investors. Comparatively, 78.6% of Ardelyx shares are held by institutional investors. 16.3% of Calithera Biosciences shares are held by company insiders. Comparatively, 15.5% of Ardelyx shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Calithera Biosciences and Ardelyx’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Calithera Biosciences $11.45 million 49.73 -$29.12 million ($1.26) -12.74
Ardelyx N/A N/A -$113.62 million ($2.44) -2.41

Calithera Biosciences has higher revenue and earnings than Ardelyx. Calithera Biosciences is trading at a lower price-to-earnings ratio than Ardelyx, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Calithera Biosciences has a beta of 3.26, suggesting that its share price is 226% more volatile than the S&P 500. Comparatively, Ardelyx has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500.

Summary

Calithera Biosciences beats Ardelyx on 7 of the 11 factors compared between the two stocks.

Calithera Biosciences Company Profile

Calithera Biosciences, Inc. is a clinical-stage pharmaceutical company. The Company focuses on discovering and developing small molecule drugs directed against tumor and immune cell targets that control key metabolic pathways in the tumor microenvironment. It is engaged in developing agents that take advantage of the metabolic requirements of tumor cells and cancer-fighting immune cells, such as cytotoxic T-cells. The Company’s lead product candidate, CB-839, is a critical enzyme in tumor cells. Its other product candidate, CB-1158, is being developed for hematology and oncology indications. CB-1158 is a potent and selective orally bioavailable inhibitor of the enzyme arginase. CB-839 is a selective, reversible and orally bioavailable inhibitor of human glutaminase. CB-1158 has single agent anti-tumor activity in syngeneic mouse tumor models that has been demonstrated to act through an immune mechanism. CB-1158 is being tested in a Phase I clinical trial in patients with solid tumors.

Ardelyx Company Profile

Ardelyx, Inc. is a clinical-stage biopharmaceutical company. The Company’s therapeutics focuses on addressing cardiorenal and gastrointestinal (GI) diseases. It operates through the research, development and commercialization of biopharmaceutical products segment. The Company’s products line includes cardiorenal portfolio and gastrointestinal portfolio. The Company’s cardiorenal portfolio includes two Phase III clinical product candidates, tenapanor in Phase III clinical development for treating hyperphosphatemia in end-stage renal disease (ESRD) patients on dialysis and RDX7675 in Phase III clinical development for treating hyperkalemia in chronic kidney disease (CKD) and heart failure patients. The cardiorenal portfolio includes tenapanor, RDX7675, RDX013 and RDX011. Its gastrointestinal portfolio is led by tenapanor for the treatment of irritable bowel syndrome with constipation (IBS-C). The gastrointestinal portfolio includes tenapanor, RDX8940, RDX011 and RDX023.

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