ContraFect (NASDAQ: CFRX) and Jazz Pharmaceuticals (NASDAQ:JAZZ) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Institutional & Insider Ownership

62.5% of ContraFect shares are owned by institutional investors. Comparatively, 91.3% of Jazz Pharmaceuticals shares are owned by institutional investors. 9.3% of ContraFect shares are owned by company insiders. Comparatively, 4.3% of Jazz Pharmaceuticals shares are owned by company 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.

Valuation and Earnings

This table compares ContraFect and Jazz Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ContraFect N/A N/A -$28.53 million ($0.23) -4.09
Jazz Pharmaceuticals $1.49 billion 5.67 $396.83 million $6.07 23.17

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

Volatility and Risk

ContraFect has a beta of -0.85, suggesting that its share price is 185% less volatile than the S&P 500. Comparatively, Jazz Pharmaceuticals has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Profitability

This table compares ContraFect and Jazz Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ContraFect N/A -84.07% -44.69%
Jazz Pharmaceuticals 23.58% 22.92% 10.07%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ContraFect and Jazz Pharmaceuticals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ContraFect 0 1 0 0 2.00
Jazz Pharmaceuticals 0 5 17 0 2.77

Jazz Pharmaceuticals has a consensus price target of $182.95, suggesting a potential upside of 30.10%. Given Jazz Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts plainly believe Jazz Pharmaceuticals is more favorable than ContraFect.

Summary

Jazz Pharmaceuticals beats ContraFect on 11 of the 12 factors compared between the two stocks.

About ContraFect

ContraFect Corporation, a clinical-stage biotechnology company, focuses on discovering and developing therapeutic protein and antibody products for the treatment of life-threatening infectious diseases in the United States. Its lead product candidates consist of CF-301, a lysin that completed Phase 1 human clinical trials for the treatment of Staph aureus bacteremia, including endocarditis caused by methicillin-resistant or methicillin-susceptible Staph aureus; and CF-404, a combination of human monoclonal antibodies (mAbs) for the treatment of life-threatening seasonal and pandemic varieties of human influenza. The company has a collaboration research agreement with The Rockefeller University to identify new lysin therapeutic candidates targeting Gram-negative bacteria; and license agreement with Trellis Bioscience LLC for mAbs in the field of influenza. ContraFect Corporation was founded in 2008 and is headquartered in Yonkers, New York.

About Jazz Pharmaceuticals

Jazz Pharmaceuticals, Inc. is a specialty pharmaceutical company focusing on the development and commercialization of pharmaceutical products to meet unmet medical needs in neurology and psychiatry. As of December 31, 2009, the Company markets two products: Xyrem (sodium oxybate) for the treatment of both cataplexy and excessive daytime sleepiness in patients with narcolepsy; and Luvox CR (fluvoxamine maleate) for the treatment of both obsessive compulsive disorder and social anxiety disorder. Its marketed products and late-stage product candidate are Xyrem (sodium oxybate) oral solution, Luvox CR (fluvoxamine maleate) Extended-Release Capsules and JZP-6 (sodium oxybate). Its other product candidates in clinical development are oral tablet forms of sodium oxybate; JZP-8 (intranasal clonazepam); JZP-4 (elpetrigine), and JZP-7 (ropinirole gel).

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