Sol-Gel Technologies (NASDAQ:SLGL – Get Free Report) and Heron Therapeutics (NASDAQ:HRTX – Get Free Report) are both small-cap healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.
Analyst Ratings
This is a breakdown of current ratings and target prices for Sol-Gel Technologies and Heron Therapeutics, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sol-Gel Technologies | 1 | 1 | 3 | 1 | 2.67 |
| Heron Therapeutics | 1 | 3 | 1 | 0 | 2.00 |
Sol-Gel Technologies currently has a consensus price target of $197.50, indicating a potential upside of 226.32%. Heron Therapeutics has a consensus price target of $2.00, indicating a potential upside of 549.35%. Given Heron Therapeutics’ higher possible upside, analysts clearly believe Heron Therapeutics is more favorable than Sol-Gel Technologies.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sol-Gel Technologies | $19.39 million | 8.77 | -$6.13 million | ($5.64) | -10.73 |
| Heron Therapeutics | $151.18 million | 0.39 | -$20.19 million | ($0.19) | -1.62 |
Sol-Gel Technologies has higher earnings, but lower revenue than Heron Therapeutics. Sol-Gel Technologies is trading at a lower price-to-earnings ratio than Heron Therapeutics, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Sol-Gel Technologies and Heron Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sol-Gel Technologies | -910.14% | -44.05% | -36.96% |
| Heron Therapeutics | -22.52% | -293.02% | -10.00% |
Risk and Volatility
Sol-Gel Technologies has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Heron Therapeutics has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.
Insider and Institutional Ownership
26.2% of Sol-Gel Technologies shares are owned by institutional investors. Comparatively, 80.0% of Heron Therapeutics shares are owned by institutional investors. 66.5% of Sol-Gel Technologies shares are owned by insiders. Comparatively, 6.1% of Heron Therapeutics shares are owned by 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.
Summary
Heron Therapeutics beats Sol-Gel Technologies on 8 of the 15 factors compared between the two stocks.
About Sol-Gel Technologies
Sol-Gel Technologies Ltd., together with its subsidiary Sol-Gel Technologies Inc., develops topical dermatological drugs for patients with severe skin conditions in Israel. The company offers Twyneo, a once-daily, non-antibiotic topical cream for the treatment of acne vulgaris; and Epsolay, a once-daily topical cream for the treatment of papulopustular (subtype II) rosacea. It also develops SGT-610 that is in Phase 3 clinical trials for the treatment of Gorlin Syndrome; and SGT-210, which has completed Phase I clinical trial, to treat rare hyperkeratinization disorders, such as Darier, PC, PPK, Olmsted, etc. In addition, the company is also involved in the development of generic topical dermatological drug products. It has collaboration with Padagis Israel Pharmaceuticals Ltd; and license agreements with Galderma Holding SA and Searchlight Pharma Inc. Sol-Gel Technologies Ltd. was incorporated in 1997 and is headquartered in Ness Ziona, Israel.
About Heron Therapeutics
Heron Therapeutics, Inc., a commercial-stage biotechnology company, focuses on enhancing the lives of patients by developing and commercializing therapeutic that enhances medical care. The company's product candidates utilize its proprietary Biochronomer, a drug delivery technology, which delivers therapeutic levels of a range of short-acting pharmacological agents over a period from days to weeks with a single administration. It offers SUSTOL (granisetron), an extended-release injection for the prevention of acute and delayed nausea and vomiting associated with moderately emetogenic chemotherapy, or anthracycline and cyclophosphamide combination chemotherapy regimens; and CINVANTI, an intravenous formulation of aprepitant, a substance P/neurokinin-1 receptor antagonist for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cancer chemotherapy, as well as nausea and vomiting associated with moderately emetogenic cancer chemotherapy. The company is also developing ZYNRELEF, a dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of the nonsteroidal anti-inflammatory drug meloxicam; and APONVIE, an intravenous formulation of a substance P/neurokinin-1 receptor antagonist indicated for the prevention of postoperative nausea and vomiting in adults. The company was formerly known as A.P. Pharma, Inc. and changed its name to Heron Therapeutics, Inc. in January 2014. Heron Therapeutics, Inc. was founded in 1983 and is headquartered in San Diego, California.
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