Reviewing Royalty Pharma (NASDAQ:RPRX) & Intercept Pharmaceuticals (NASDAQ:ICPT)

Royalty Pharma (NASDAQ:RPRX) and Intercept Pharmaceuticals (NASDAQ:ICPT) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Royalty Pharma and Intercept Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royalty Pharma 0 1 2 0 2.67
Intercept Pharmaceuticals 2 11 5 0 2.17

Royalty Pharma presently has a consensus target price of $49.00, indicating a potential upside of 36.76%. Intercept Pharmaceuticals has a consensus target price of $33.00, indicating a potential upside of 89.00%. Given Intercept Pharmaceuticals’ higher possible upside, analysts clearly believe Intercept Pharmaceuticals is more favorable than Royalty Pharma.

Volatility & Risk

Royalty Pharma has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Intercept Pharmaceuticals has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Profitability

This table compares Royalty Pharma and Intercept Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royalty Pharma 43.43% 13.02% 8.07%
Intercept Pharmaceuticals -49.89% N/A -30.72%

Institutional and Insider Ownership

40.6% of Royalty Pharma shares are owned by institutional investors. Comparatively, 66.7% of Intercept Pharmaceuticals shares are owned by institutional investors. 25.9% of Royalty Pharma shares are owned by insiders. Comparatively, 17.9% of Intercept Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Royalty Pharma and Intercept Pharmaceuticals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royalty Pharma $2.12 billion 10.25 $975.04 million $1.61 22.25
Intercept Pharmaceuticals $312.69 million 1.85 -$274.88 million ($8.34) -2.09

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

Summary

Royalty Pharma beats Intercept Pharmaceuticals on 10 of the 14 factors compared between the two stocks.

About Royalty Pharma

Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the United States. It is also involved in the identification, evaluation, and acquisition of royalties on various biopharmaceutical therapies. In addition, the company collaborates with innovators from academic institutions, research hospitals and not-for-profits, small and mid-cap biotechnology companies, and pharmaceutical companies. Its portfolio includes royalties on approximately 45 commercial products and 5 development-stage product candidates in various therapeutic areas, such as rare disease, oncology, neurology, infectious disease, cardiology, and diabetes. The company has royalties on various product, such as Cystic fibrosis franchise, including Kalydeco, Orkambi, Symdeko/Symkevi, and Trikafta/Kaftrio; HIV franchise comprising Atripla, Truvada, Emtriva, Complera, Stribild, Genvoya, Descovy, Odefsey, Symtuza, and Biktarvy; Tradjenta, Onglyza, Kombiglyze, Galvus, Eucreas, and Nesina; Tysabri, Imbruvica, Xtandi, Promacta, Farxiga/Onglyza, Prevymis, Emgality, Crysvita, Erleada, IDHIFA, Trodelvy, Nurtec ODT, Tazverik, and Evrysdi; and other products, such as Bosulif, Cimzia, Conbriza/Fablyn/Viviant, Entyvio, Lexiscan, Mircera, Myozyme, Nesina, Priligy, and Soliqua, as well as Tecfidera, Letairis, Lyrica, Remicade, Humira, Prezista, Rotateq, and Thalomid. Royalty Pharma plc was founded in 1996 and is based in New York, New York.

About Intercept Pharmaceuticals

Intercept Pharmaceuticals, Inc. operates as a biopharmaceutical company. The firm engages in the research, development and commercialization of novel therapeutics in treating chronic liver diseases. Its product pipeline includes OCALIVA which is used for the treatment of biliary cholangitis, nonalcoholic steatohepatitis, sclerosing cholangitis and biliary atresia. The company was founded by Mark E. Pruzanski and Roberto Pellicciari on September 4, 2002 and is headquartered in New York, NY.

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