Contrasting GRAIL (NASDAQ:GRAL) and Exelixis (NASDAQ:EXEL)

Exelixis (NASDAQ:EXEL) and GRAIL (NASDAQ:GRAL) are both healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for Exelixis and GRAIL, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exelixis	1	12	6	1	2.35
GRAIL	1	6	5	0	2.33

Exelixis currently has a consensus price target of $50.29, suggesting a potential downside of 13.84%. GRAIL has a consensus price target of $70.30, suggesting a potential downside of 12.96%. Given GRAIL’s higher probable upside, analysts plainly believe GRAIL is more favorable than Exelixis.

Insider and Institutional Ownership

85.3% of Exelixis shares are held by institutional investors. 2.6% of Exelixis shares are held by insiders. Comparatively, 1.8% of GRAIL shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Exelixis has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, GRAIL has a beta of 3.25, indicating that its share price is 225% more volatile than the S&P 500.

Profitability

This table compares Exelixis and GRAIL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Exelixis	35.33%	42.17%	31.76%
GRAIL	-236.95%	-15.88%	-14.02%

Valuation & Earnings

This table compares Exelixis and GRAIL”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exelixis	$2.32 billion	6.23	$782.57 million	$3.18	18.35
GRAIL	$147.17 million	24.52	-$408.35 million	($9.75)	-8.28

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

Summary

Exelixis beats GRAIL on 12 of the 15 factors compared between the two stocks.

About Exelixis

Exelixis, Inc., an oncology company, focuses on the discovery, development, and commercialization of new medicines for difficult-to-treat cancers in the United States. The company offers CABOMETYX tablets for the treatment of patients with advanced renal cell carcinoma who received prior anti-angiogenic therapy; and COMETRIQ capsules for the treatment of progressive and metastatic medullary thyroid cancer. Its CABOMETYX and COMETRIQ are derived from cabozantinib, an inhibitor of multiple tyrosine kinases, including MET, AXL, RET, and VEGF receptors. The company also offers COTELLIC, an inhibitor of MEK as a combination regimen to treat specific forms of advanced melanoma; and MINNEBRO, an oral non-steroidal selective blocker of the mineralocorticoid receptor for the treatment of hypertension in Japan. It develops zanzalintinib, a novel, potent, next-generation oral tyrosine kinase inhibitor (TKI) that targets VEGF receptors, MET and the TAM kinases (TYRO3, AXL and MER); and XB002, a next-generation tissue factor (TF)-targeting ADC, administered via intravenous infusion and composed of a human monoclonal antibody (mAb) against TF that is conjugated to an auristatin-based microtubulin inhibitor (MTI) payload. It has research collaborations and license agreements with Ipsen Pharma SAS; Takeda Pharmaceutical Company Ltd.; F. Hoffmann-La Roche Ltd.; Redwood Bioscience, Inc.; R.P. Scherer Technologies, LLC; Catalent Pharma Solutions, Inc.; NBE Therapeutics AG; Aurigene Discovery Technologies Limited; Iconic Therapeutics, Inc.; Invenra, Inc.; StemSynergy Therapeutics, Inc.; Genentech, Inc.; Bristol-Myers Squibb Company; and Daiichi Sankyo Company, Limited, as well as clinical development agreement with Sairopa B.V. for ADU-1805. The company was formerly known as Exelixis Pharmaceuticals, Inc. and changed its name to Exelixis, Inc. in February 2000. Exelixis, Inc. was incorporated in 1994 and is headquartered in Alameda, California.

About GRAIL

GRAIL, Inc. operates as a commercial-stage healthcare company, which engages in the development of a technology for early detection of cancer. It utilizes machine learning, software, and automation to detect and identify multiple deadly cancer types in earlier stages. The company was founded by Jeffrey T. Huber, William H. Rastetter, Mostafa Ronaghi, and Richard D. Klausner on September 11, 2015 and is headquartered in Menlo Park, CA.