Seres Therapeutics (NASDAQ: MCRB) and Ophthotech Corporation (NASDAQ:OPHT) are both small-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Institutional and Insider Ownership

74.8% of Seres Therapeutics shares are owned by institutional investors. Comparatively, 61.6% of Ophthotech Corporation shares are owned by institutional investors. 35.7% of Seres Therapeutics shares are owned by company insiders. Comparatively, 2.0% of Ophthotech Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Seres Therapeutics and Ophthotech Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Seres Therapeutics $22.08 million 24.75 -$92.65 million ($2.41) -5.60
Ophthotech Corporation $10.31 million 10.32 -$181.99 million ($5.39) -0.55

Seres Therapeutics has higher revenue and earnings than Ophthotech Corporation. Seres Therapeutics is trading at a lower price-to-earnings ratio than Ophthotech Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Seres Therapeutics and Ophthotech Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Seres Therapeutics 0 0 5 0 3.00
Ophthotech Corporation 0 12 0 0 2.00

Seres Therapeutics currently has a consensus price target of $18.25, suggesting a potential upside of 35.29%. Ophthotech Corporation has a consensus price target of $60.88, suggesting a potential upside of 1,956.59%. Given Ophthotech Corporation’s higher probable upside, analysts plainly believe Ophthotech Corporation is more favorable than Seres Therapeutics.

Profitability

This table compares Seres Therapeutics and Ophthotech Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Seres Therapeutics -441.38% -80.21% -37.80%
Ophthotech Corporation -1,866.58% N/A -70.63%

Risk and Volatility

Seres Therapeutics has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, Ophthotech Corporation has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.

Summary

Seres Therapeutics beats Ophthotech Corporation on 10 of the 13 factors compared between the two stocks.

Seres Therapeutics Company Profile

Seres Therapeutics, Inc. is a microbiome therapeutics platform company. The Company is engaged in developing a class of biological drugs, which is referred as Ecobiotic microbiome therapeutics. The Company’s drugs are designed to restore health by repairing the function of a dysbiotic microbiome. The Company is focused on implementing its microbiome therapeutics platform to develop Ecobiotic microbiome therapeutics that treats dysbiosis in the colonic microbiome. SER-109 is its lead product candidate, which is designed to prevent further recurrences of Clostridium difficile infection (CDI). The Company is developing additional product candidates, including SER-262 to prevent an initial recurrence of primary CDI; SER-287 and SER-301, to treat inflammatory bowel disease (IBD), including ulcerative colitis, and SER-155 to treat enteric bacterial pathogens.

Ophthotech Corporation Company Profile

Ophthotech Corporation is a biopharmaceutical company. The Company is engaged in the development of therapeutics to treat ophthalmic diseases, with a focus on diseases of the back of the eye. Its primary focus is developing therapeutics for age-related macular degeneration (AMD), which is a disorder of the central portion of the retina, known as the macula, that may result in blindness. Its product candidates include Fovista and Zimura. Fovista is designed to target platelet derived growth factor (PDGF) in combination with anti-vascular endothelial growth factor (VEGF) drugs to disrupt the formation of abnormal new blood vessels in wet AMD. Zimura targets complement factor C5, a central component of the complement cascade. The Company has initiated a Phase II/III clinical trial investigating Zimura for treatment of geographic atrophy.

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