Lion Biotechnologies (NASDAQ: IOVA) and CareDx (NASDAQ:CDNA) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitabiliy, dividends, valuation, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Lion Biotechnologies and CareDx’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lion Biotechnologies N/A N/A N/A ($2.10) -2.62
CareDx $45.65 million 0.67 -$11.23 million ($2.01) -0.71

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

Profitability

This table compares Lion Biotechnologies and CareDx’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lion Biotechnologies N/A -18.59% -17.95%
CareDx -77.02% -69.67% -20.13%

Institutional and Insider Ownership

77.8% of Lion Biotechnologies shares are owned by institutional investors. Comparatively, 34.9% of CareDx shares are owned by institutional investors. 13.2% of Lion Biotechnologies shares are owned by company insiders. Comparatively, 5.4% of CareDx 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.

Risk and Volatility

Lion Biotechnologies has a beta of 4.43, indicating that its stock price is 343% more volatile than the S&P 500. Comparatively, CareDx has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Lion Biotechnologies and CareDx, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lion Biotechnologies 0 0 9 0 3.00
CareDx 0 0 0 0 N/A

Lion Biotechnologies presently has a consensus price target of $14.86, suggesting a potential upside of 170.13%. Given Lion Biotechnologies’ higher probable upside, equities research analysts clearly believe Lion Biotechnologies is more favorable than CareDx.

Summary

Lion Biotechnologies beats CareDx on 8 of the 10 factors compared between the two stocks.

About Lion Biotechnologies

Iovance Biotherapeutics, Inc., formerly Lion Biotechnologies, Inc., is a clinical-stage biopharmaceutical company. The Company is focused on the development and commercialization of cancer immunotherapy products designed to harness the power of a patient’s own immune system to eradicate cancer cells. The Company’s lead program is an adoptive cell therapy utilizing tumor-infiltrating lymphocytes, which are T cells derived from patients’ tumors, for the treatment of metastatic melanoma. As of December 31, 2016, it had an on-going Phase II clinical trial of its lead product candidate, LN-144, TIL for the treatment of metastatic melanoma. The Company is developing LN-145 to treat cervical and head and neck cancers. It is collaborating with the National Cancer Institute to evaluate unmodified TIL in other solid tumor indications, such as ocular melanoma, bladder, breast and lung cancer. It is collaborating with the NCI to evaluate TIL in combination with the checkpoint inhibitor, Keytruda.

About CareDx

CareDx, Inc. is a molecular diagnostics company. The Company is focused on the discovery, development and commercialization of clinically differentiated diagnostic surveillance solutions for transplant patients. The Company’s commercialized testing solution, the AlloMap heart transplant molecular test (AlloMap), is a gene expression test that helps clinicians monitor and identify heart transplant recipients with stable graft function having a low probability of moderate/severe acute cellular rejection. Its products under development for transplant monitoring include AlloSure, a development-stage transplant surveillance solution, which applies next generation sequencing to detect and quantitate genetic differences between donor-derived cell-free deoxyribonucleic acid (dd-cfDNA) in the blood stream emanating from the donor heart. It offers the AlloMap Score Variability service, which provides complementary information to help personalize long-term care of heart transplant recipients.

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