Recro Pharma (NASDAQ: REPH) and MyoKardia (NASDAQ:MYOK) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitabiliy, dividends and earnings.

Risk and Volatility

Recro Pharma has a beta of -0.6, suggesting that its share price is 160% less volatile than the S&P 500. Comparatively, MyoKardia has a beta of 6.1, suggesting that its share price is 510% more volatile than the S&P 500.

Earnings & Valuation

This table compares Recro Pharma and MyoKardia’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Recro Pharma $70.34 million 2.06 -$9.47 million ($2.56) -2.97
MyoKardia $41.27 million 13.07 -$15.46 million ($0.65) -26.38

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

Profitability

This table compares Recro Pharma and MyoKardia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Recro Pharma -45.15% -61.09% -19.89%
MyoKardia -39.44% -15.27% -11.65%

Insider and Institutional Ownership

64.2% of Recro Pharma shares are held by institutional investors. Comparatively, 47.7% of MyoKardia shares are held by institutional investors. 21.6% of Recro Pharma shares are held by company insiders. Comparatively, 46.1% of MyoKardia shares are held 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Recro Pharma and MyoKardia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Recro Pharma 0 1 5 0 2.83
MyoKardia 0 0 4 0 3.00

Recro Pharma currently has a consensus target price of $14.75, suggesting a potential upside of 94.08%. MyoKardia has a consensus target price of $28.00, suggesting a potential upside of 63.27%. Given Recro Pharma’s higher possible upside, analysts plainly believe Recro Pharma is more favorable than MyoKardia.

Summary

MyoKardia beats Recro Pharma on 8 of the 13 factors compared between the two stocks.

About Recro Pharma

Recro Pharma, Inc. is a clinical-stage specialty pharmaceutical company. The Company is engaged in developing products for hospitals and ambulatory care settings that is developing non-opioid products for treatment of serious acute pain. The Company’s lead product candidate is an injectable form of meloxicam. Its product candidates for pain indications include injectable meloxicam, a product candidate in development for the treatment of acute post-operative pain; Dex-IN, a product candidate under development for the treatment of post-operative pain; Dex-SL, a product candidate for the treatment of chronic pain, and Fadolmidine (Fado), a product candidate used by injection into the spine for pain associated with surgery or certain types of chronic pain and which the Company pursues as a topical product for local application to treat serious pain associated with nerve damage to local tissues (neuropathies), especially of the lower extremities, which can occur in diabetic patients.

About MyoKardia

MyoKardia, Inc. is a clinical-stage biopharmaceutical company. The Company focuses on the treatment of heritable cardiomyopathies, a group of rare, genetically-driven forms of heart failure that result from biomechanical defects in cardiac muscle contraction. The Company is engaged in the business of developing and commercializing therapeutics. The Company has used its precision medicine platform to generate an initial pipeline of over four therapeutic programs for the chronic treatment of two forms of heritable cardiomyopathy-hypertrophic cardiomyopathy (HCM), and dilated cardiomyopathy (DCM). Additionally, the Company has three preclinical programs, HCM-2, DCM-2 and LUS-1. Its lead product candidate, MYK-461, is an orally-administered small molecule designed to reduce excessive cardiac muscle contractility leading to HCM.

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