Sol-Gel Technologies (NASDAQ:SLGL) and Assembly Biosciences (NASDAQ:ASMB) Critical Review

Sol-Gel Technologies (NASDAQ:SLGL) and Assembly Biosciences (NASDAQ:ASMB) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Sol-Gel Technologies and Assembly Biosciences, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sol-Gel Technologies	0	2	1	0	2.33
Assembly Biosciences	1	1	6	0	2.63

Sol-Gel Technologies presently has a consensus price target of $110.00, suggesting a potential upside of 74.58%. Assembly Biosciences has a consensus price target of $41.00, suggesting a potential upside of 55.60%. Given Sol-Gel Technologies’ higher probable upside, research analysts clearly believe Sol-Gel Technologies is more favorable than Assembly Biosciences.

Risk & Volatility

Sol-Gel Technologies has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Assembly Biosciences has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Profitability

This table compares Sol-Gel Technologies and Assembly Biosciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sol-Gel Technologies	-47.37%	-33.61%	-26.27%
Assembly Biosciences	-103.65%	-59.01%	-28.61%

Valuation & Earnings

This table compares Sol-Gel Technologies and Assembly Biosciences”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sol-Gel Technologies	$11.54 million	15.23	-$10.58 million	($3.26)	-19.33
Assembly Biosciences	$28.52 million	14.62	-$40.18 million	($4.79)	-5.50

Sol-Gel Technologies has higher earnings, but lower revenue than Assembly Biosciences. Sol-Gel Technologies is trading at a lower price-to-earnings ratio than Assembly Biosciences, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

26.2% of Sol-Gel Technologies shares are owned by institutional investors. Comparatively, 19.9% of Assembly Biosciences shares are owned by institutional investors. 66.5% of Sol-Gel Technologies shares are owned by company insiders. Comparatively, 5.3% of Assembly Biosciences 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.

Summary

Sol-Gel Technologies beats Assembly Biosciences on 10 of the 14 factors compared between the two stocks.

About Sol-Gel Technologies

Sol-Gel Technologies Ltd., together with its subsidiary Sol-Gel Technologies Inc., develops topical dermatological drugs for patients with severe skin conditions in Israel. The company offers Twyneo, a once-daily, non-antibiotic topical cream for the treatment of acne vulgaris; and Epsolay, a once-daily topical cream for the treatment of papulopustular (subtype II) rosacea. It also develops SGT-610 that is in Phase 3 clinical trials for the treatment of Gorlin Syndrome; and SGT-210, which has completed Phase I clinical trial, to treat rare hyperkeratinization disorders, such as Darier, PC, PPK, Olmsted, etc. In addition, the company is also involved in the development of generic topical dermatological drug products. It has collaboration with Padagis Israel Pharmaceuticals Ltd; and license agreements with Galderma Holding SA and Searchlight Pharma Inc. Sol-Gel Technologies Ltd. was incorporated in 1997 and is headquartered in Ness Ziona, Israel.

About Assembly Biosciences

Assembly Biosciences, Inc., a biotechnology company, develops therapeutic candidates for the treatment of viral diseases. It develops ABI-5366, a long-acting herpes simplex virus (HSV) helicase-primase inhibitor that is in Phase 1a/1b clinical trial to treat recurrent genital herpes; ABI-1179, which is in Phase 1a/1b clinical trial for the treatment of recurrent genital herpes; and ABI-6250, a small molecule orally bioavailable hepatitis delta virus entry inhibitor that is in Phase 1a clinical trial. The company also develops ABI-4334, a next-generation capsid assembly modulator, which is in Phase 1b clinical trial for the treatment of hepatitis B virus (HBV). In addition, it develops an oral non-nucleoside polymerase inhibitor targeting transplant-related herpesviruses; and a small molecule interferon-a receptor agonist targeting HBV and HDV. The company has collaboration agreements with Gilead Sciences, Inc. and BeiGene, Ltd. The company was formerly known as Ventrus Biosciences, Inc. and changed its name to Assembly Biosciences, Inc. in June 2014. Assembly Biosciences, Inc. was incorporated in 2005 and is headquartered in South San Francisco, California.