Xencor (NASDAQ: XNCR) and Achaogen (NASDAQ:AKAO) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Xencor and Achaogen, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xencor 0 2 4 0 2.67
Achaogen 0 1 8 0 2.89

Xencor currently has a consensus target price of $30.80, suggesting a potential upside of 43.06%. Achaogen has a consensus target price of $25.63, suggesting a potential upside of 131.90%. Given Achaogen’s stronger consensus rating and higher possible upside, analysts plainly believe Achaogen is more favorable than Xencor.

Profitability

This table compares Xencor and Achaogen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xencor -148.29% -15.26% -11.11%
Achaogen -593.61% -80.44% -51.17%

Risk & Volatility

Xencor has a beta of 2.09, meaning that its stock price is 109% more volatile than the S&P 500. Comparatively, Achaogen has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.

Valuation & Earnings

This table compares Xencor and Achaogen’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Xencor $87.52 million 11.55 $23.62 million ($1.00) -21.53
Achaogen $41.77 million 11.21 -$71.22 million ($3.60) -3.07

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

Institutional & Insider Ownership

77.6% of Xencor shares are owned by institutional investors. Comparatively, 85.8% of Achaogen shares are owned by institutional investors. 4.0% of Xencor shares are owned by insiders. Comparatively, 8.4% of Achaogen shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Xencor beats Achaogen on 8 of the 13 factors compared between the two stocks.

Xencor Company Profile

Xencor, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on discovering and developing engineered monoclonal antibodies to treat severe and life threatening diseases. It has developed two clinical-stage product candidates, using its Immune Inhibitor Fc platform: XmAb5871, which is in two Phase II trials and is being developed for autoimmune disease, and XmAb7195, which is in a Phase I trial and is being developed for asthma and allergic diseases. It is also developing a pipeline of bispecific antibody candidates using its heterodimer Fc bispecific technology: XmAb14045, which is in a Phase I trial for the treatment of acute myeloid leukemia (AML); XmAb13676, which is in a Phase I trial for the treatment of B-cell malignancies; XmAb18087, which is in preclinical development for the treatment of neuroendocrine tumors, and XmAb20717, which is in preclinical development for the treatment of various cancers and is its dual checkpoint inhibitor.

Achaogen Company Profile

Achaogen, Inc. is a late-stage biopharmaceutical company. The Company is engaged in the discovery, development and commercialization of antibacterial treatments against multi-drug resistant (MDR) gram-negative infections. The Company is involved in researching and developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections, including complicated urinary tract infection (cUTI), blood stream infections and other infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). Plazomicin is an intravenous aminoglycoside antibiotic. The Company has developed plazomicin by chemically modifying sisomicin, a naturally occurring aminoglycoside, in order to overcome common aminoglycoside resistance mechanisms. The Company has a portfolio of small molecule and antibody programs. The Company’s Early Development programs include C-Scape and LpxC.

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