Axovant Sciences (NYSE: AXON) and Flex Pharma (NASDAQ:FLKS) are both small-cap healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Axovant Sciences and Flex Pharma, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Axovant Sciences 2 3 6 0 2.36
Flex Pharma 0 1 5 0 2.83

Axovant Sciences presently has a consensus price target of $14.68, suggesting a potential upside of 85.61%. Flex Pharma has a consensus price target of $16.80, suggesting a potential upside of 395.58%. Given Flex Pharma’s stronger consensus rating and higher possible upside, analysts clearly believe Flex Pharma is more favorable than Axovant Sciences.

Profitability

This table compares Axovant Sciences and Flex Pharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Axovant Sciences N/A -167.85% -104.54%
Flex Pharma -2,410.97% -64.15% -59.78%

Earnings & Valuation

This table compares Axovant Sciences and Flex Pharma’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Axovant Sciences N/A N/A -$207.25 million ($2.09) -3.78
Flex Pharma $1.48 million 39.59 -$35.58 million ($2.13) -1.59

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

Institutional and Insider Ownership

27.7% of Flex Pharma shares are owned by institutional investors. 72.5% of Axovant Sciences shares are owned by company insiders. Comparatively, 45.4% of Flex Pharma shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Axovant Sciences has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Flex Pharma has a beta of 3.3, indicating that its stock price is 230% more volatile than the S&P 500.

Summary

Flex Pharma beats Axovant Sciences on 8 of the 12 factors compared between the two stocks.

About Axovant Sciences

Axovant Sciences Ltd. is a clinical-stage biopharmaceutical company. The Company is focused on acquiring, developing and commercializing therapeutics for the treatment of dementia, including Alzheimer’s disease and Lewy body dementia. The Company intends to develop a pipeline of product candidates to address the cognitive, functional and behavioral aspects of dementia and related neurological disorders. The Company is focused to develop its lead product candidate, intepirdine, a selective 5-hydroxytryptamine 6 receptor antagonist, for the treatment of Alzheimer’s disease and dementia with Lewy bodies (DLB). The Company also focuses on developing nelotanserin, a selective 5-hydroxytryptamine 2A receptor inverse agonist, for the treatment of rapid eye movement (REM) behavior disorder (RBD) in DLB patients, and visual hallucinations in patients with Lewy body dementia. The Company’s pipeline also includes RVT-103 and RVT-104.

About Flex Pharma

Flex Pharma, Inc. is a biotechnology company. The Company develops treatments for nocturnal leg cramps, muscle cramps and spasms associated with severe neuromuscular conditions, and exercise associated muscle cramps (EAMCs). The Company’s product candidates activate certain receptors in primary sensory neurons, which then act through neuronal circuits to reduce the repetitive firing, or hyperexcitability, of alpha-motor neurons in the spinal cord, thereby preventing or reducing the frequency and intensity of muscle cramps and spasms. The Company operates through developing and commercializing products for nocturnal leg cramps, muscle cramps, spasms and spasticity associated with severe neuromuscular conditions, and exercise-associated muscle cramps segment. The Company’s lead drug product candidate is FLX-787, which is in the Phase II clinical trial stage. It is developing a consumer brand and products specifically formulated to treat athletes suffering from EAMCs.

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