Nektar Therapeutics (NASDAQ: NKTR) and Alkermes (NASDAQ:ALKS) are both mid-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for Nektar Therapeutics and Alkermes, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nektar Therapeutics 0 1 12 0 2.92
Alkermes 0 5 5 0 2.50

Nektar Therapeutics presently has a consensus price target of $39.36, indicating a potential downside of 45.33%. Alkermes has a consensus price target of $64.50, indicating a potential upside of 9.86%. Given Alkermes’ higher possible upside, analysts plainly believe Alkermes is more favorable than Nektar Therapeutics.

Valuation and Earnings

This table compares Nektar Therapeutics and Alkermes’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nektar Therapeutics $165.44 million 68.53 -$153.52 million ($0.72) -100.00
Alkermes $745.69 million 12.11 -$208.44 million ($1.11) -52.89

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

Insider & Institutional Ownership

96.0% of Nektar Therapeutics shares are held by institutional investors. Comparatively, 99.7% of Alkermes shares are held by institutional investors. 5.4% of Nektar Therapeutics shares are held by company insiders. Comparatively, 5.3% of Alkermes shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Nektar Therapeutics and Alkermes’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nektar Therapeutics -42.08% -190.68% -19.50%
Alkermes -20.12% -7.27% -5.05%

Volatility & Risk

Nektar Therapeutics has a beta of 1.81, meaning that its stock price is 81% more volatile than the S&P 500. Comparatively, Alkermes has a beta of 2.13, meaning that its stock price is 113% more volatile than the S&P 500.

Summary

Alkermes beats Nektar Therapeutics on 8 of the 14 factors compared between the two stocks.

Nektar Therapeutics Company Profile

Nektar Therapeutics is a biopharmaceutical company that discovers and develops medicines in areas of high unmet medical need. The Company’s research and development pipeline of new investigational drugs includes treatments for cancer, auto-immune disease and chronic pain. It leverages its chemistry platform to discover and design new drug candidates. These drug candidates utilize its polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action. Its programs include Immuno-oncology (I-O), Immunology, Pain-NKTR-181 and Oncology-ONZEALD. It is developing medicines designed to directly or indirectly modulate the activity of key immune cells, such as cytotoxic T cells and Natural Killer (NK) cells, to increase their numbers and improve their function to recognize and attack cancer cells.

Alkermes Company Profile

Alkermes plc is a biopharmaceutical company. The Company is engaged in the researching, developing and commercializing pharmaceutical products that are designed to address medical needs of patients in therapeutic areas. The Company has a portfolio of marketed drug products and a clinical pipeline of products that address central nervous system (CNS) disorders, such as schizophrenia, depression, addiction and multiple sclerosis (MS). The Company’s products include ARISTADA, VIVITROL, INVEGA SUSTENNA, XEPLION, INVEGA TRINZA, TREVICTA, RISPERDAL CONSTA, AMPYRA, FAMPYRA, BYDUREON, Aripiprazole lauroxil, ALKS 5461, ALKS 3831, ALKS 8700, ALKS 6428, ALKS 4230 and ALKS 7119. The Company’s product platforms include injectable extended-release microsphere technology, LinkeRx technology, NanoCrystal technology and oral controlled release (OCR) technology. ARISTADA is an extended-release intramuscular injectable suspension for the treatment of schizophrenia.

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