Trevena (NASDAQ: TRVN) and Conatus Pharmaceuticals (NASDAQ:CNAT) are both small-cap healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Volatility and Risk

Trevena has a beta of -0.58, suggesting that its stock price is 158% less volatile than the S&P 500. Comparatively, Conatus Pharmaceuticals has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Trevena and Conatus Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trevena 0 1 9 0 2.90
Conatus Pharmaceuticals 0 0 5 0 3.00

Trevena presently has a consensus price target of $8.65, suggesting a potential upside of 394.29%. Conatus Pharmaceuticals has a consensus price target of $14.00, suggesting a potential upside of 200.43%. Given Trevena’s higher probable upside, equities analysts plainly believe Trevena is more favorable than Conatus Pharmaceuticals.

Profitability

This table compares Trevena and Conatus Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trevena N/A -150.22% -94.66%
Conatus Pharmaceuticals -80.98% -83.02% -25.04%

Institutional and Insider Ownership

56.1% of Trevena shares are owned by institutional investors. Comparatively, 36.8% of Conatus Pharmaceuticals shares are owned by institutional investors. 4.6% of Trevena shares are owned by company insiders. Comparatively, 13.9% of Conatus Pharmaceuticals shares are owned by company 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 & Valuation

This table compares Trevena and Conatus Pharmaceuticals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Trevena $3.75 million 29.07 -$102.99 million ($1.65) -1.06
Conatus Pharmaceuticals $800,000.00 174.75 -$29.73 million ($0.81) -5.75

Conatus Pharmaceuticals has lower revenue, but higher earnings than Trevena. Conatus Pharmaceuticals is trading at a lower price-to-earnings ratio than Trevena, indicating that it is currently the more affordable of the two stocks.

Summary

Conatus Pharmaceuticals beats Trevena on 8 of the 14 factors compared between the two stocks.

About Trevena

Trevena Inc. is a biopharmaceutical company, which is engaged in developing various therapies. The Company is developing OLINVO, a u-receptor G protein pathway selective modulator (u-GPS) for the management of moderate-to-severe acute pain where intravenous (IV) administration is preferred. It is focused on commercializing it in the United States for use in acute care settings, such as hospitals and ambulatory surgery centers. It is also developing TRV250, a G protein biased ligand targeting the o-receptor, as a compound with a non-narcotic mechanism for the treatment of migraine. TRV250 also may have utility in a range of other central nervous system (CNS) indications. It is focused on commencing a Phase I study of TRV250 in the United Kingdom. Its ABLE product platform is a collection of biological information, in vitro assays, know-how and expertise that it uses to identify unique G protein coupled receptors (GPCR)-targeted biased ligands with various pharmaceutical properties.

About Conatus Pharmaceuticals

Conatus Pharmaceuticals Inc. is a biotechnology company. The Company focuses on the development and commercialization of medicines to treat liver disease. The Company operates through commercialization and development of pharmaceutical products segment. The Company is engaged in developing emricasan, which is an orally active pan-caspase protease inhibitor for the treatment of patients with chronic liver disease. Emricasan has the potential to interrupt the progression of liver disease and provide treatment options in multiple areas of liver disease. Emricasan is designed to slow or halt the progression of chronic liver disease caused by fibrosis and cirrhosis. Emricasan works by inhibiting caspases, which are a family of related enzymes that plays as modulators of critical cellular functions, including functions that result in apoptosis and inflammation.

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