DURECT Corporation (NASDAQ: DRRX) and Atara Biotherapeutics (NASDAQ:ATRA) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Volatility and Risk

DURECT Corporation has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500. Comparatively, Atara Biotherapeutics has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.

Insider & Institutional Ownership

45.8% of DURECT Corporation shares are held by institutional investors. Comparatively, 83.0% of Atara Biotherapeutics shares are held by institutional investors. 10.3% of DURECT Corporation shares are held by company insiders. Comparatively, 16.2% of Atara Biotherapeutics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for DURECT Corporation and Atara Biotherapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DURECT Corporation 0 0 2 0 3.00
Atara Biotherapeutics 1 1 3 0 2.40

DURECT Corporation presently has a consensus price target of $3.00, indicating a potential upside of 47.06%. Atara Biotherapeutics has a consensus price target of $26.75, indicating a potential upside of 75.99%. Given Atara Biotherapeutics’ higher probable upside, analysts plainly believe Atara Biotherapeutics is more favorable than DURECT Corporation.

Profitability

This table compares DURECT Corporation and Atara Biotherapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DURECT Corporation -221.01% -629.35% -85.43%
Atara Biotherapeutics N/A -39.54% -37.40%

Earnings & Valuation

This table compares DURECT Corporation and Atara Biotherapeutics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DURECT Corporation $16.15 million 18.57 -$33.04 million ($0.25) -8.16
Atara Biotherapeutics N/A N/A -$98.03 million ($3.33) -4.56

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

Summary

Atara Biotherapeutics beats DURECT Corporation on 7 of the 12 factors compared between the two stocks.

About DURECT Corporation

Durect Corporation is a biopharmaceutical company with research and development programs. The Company’s products candidates include DUR-928, oral for metabolic/lipid disorders, and DUR-928, injectable for acute organ injuries. Its other product candidates include POSIMIR (controlled release injection of bupivacaine), REMOXY (oral controlled release oxycodone), ORADUR-ADHD, ELADUR (controlled release injection of bupivicane), Relday (risperidone), ORADUR-based opioid (hydromorphone) and SABER-based ophthalmic. The Company’s ALZET product line consists of miniature, implantable osmotic pumps and accessories used for experimental research in mice, rats and other laboratory animals. The Company also manufactures and sells osmotic pumps used in laboratory research and design; and develops and manufactures a range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products.

About Atara Biotherapeutics

Atara Biotherapeutics, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on developing therapies for patients with severe and life-threatening diseases. The Company operates through the business of developing and commercializing therapeutics segment. The Company is focused on developing allogeneic or third-party derived antigen-specific T-cells. T-cells are a type of white blood cell. The Company’s product candidate, ATA129, is a third-party derived Epstein-Barr virus CTL for the treatment of Epstein-Barr virus (EBV). ATA188 is in development for the treatment of multiple sclerosis. ATA520, which is a third-party donor derived WT1-CTL, targets cancers expressing the antigen Wilms Tumor 1 (WT1). ATA520 is in Phase I clinical trials. The Company’s T-cell product candidate, ATA230, which is a third-party derived cytomegalovirus-CTL (CMV-CTL), is in Phase II clinical trials for refractory CMV.

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