Sutro Biopharma (NASDAQ:STRO) versus Protagonist Therapeutics (NASDAQ:PTGX) Critical Review

Protagonist Therapeutics (NASDAQ:PTGX) and Sutro Biopharma (NASDAQ:STRO) are both healthcare companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Profitability

This table compares Protagonist Therapeutics and Sutro Biopharma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Protagonist Therapeutics	29.40%	12.03%	11.23%
Sutro Biopharma	-395.25%	N/A	-88.12%

Volatility and Risk

Protagonist Therapeutics has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, Sutro Biopharma has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Insider and Institutional Ownership

98.6% of Protagonist Therapeutics shares are owned by institutional investors. Comparatively, 97.0% of Sutro Biopharma shares are owned by institutional investors. 5.2% of Protagonist Therapeutics shares are owned by insiders. Comparatively, 1.8% of Sutro Biopharma shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Protagonist Therapeutics and Sutro Biopharma, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Protagonist Therapeutics	0	0	16	2	3.11
Sutro Biopharma	1	0	10	2	3.00

Protagonist Therapeutics currently has a consensus target price of $158.19, suggesting a potential upside of 14.27%. Sutro Biopharma has a consensus target price of $49.50, suggesting a potential upside of 430.55%. Given Sutro Biopharma’s higher probable upside, analysts plainly believe Sutro Biopharma is more favorable than Protagonist Therapeutics.

Earnings and Valuation

This table compares Protagonist Therapeutics and Sutro Biopharma”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Protagonist Therapeutics	$281.99 million	31.77	-$130.15 million	$1.03	134.40
Sutro Biopharma	$45.70 million	3.38	-$191.09 million	($11.97)	-0.78

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

Summary

Protagonist Therapeutics beats Sutro Biopharma on 13 of the 14 factors compared between the two stocks.

About Protagonist Therapeutics

Protagonist Therapeutics, Inc., a biopharmaceutical company, develops peptide-based drugs for hematology and blood disorders, and inflammatory and immunomodulatory diseases. It is developing Rusfertide (PTG-300), an injectable hepcidin mimetic that completed phase 2 clinical trials for the treatment of polycythemia vera and other blood disorders; and JNJ-2113, an orally delivered investigational drug to block biological pathways that completed phase 2b clinical trials for the treatment of moderate-to-severe plaque psoriasis; and PN-943, an orally delivered, gut-restricted alpha 4 beta 7 specific integrin antagonist completed a phase 2 clinical trials in patients with moderate to severe ulcerative colitis. The company has a license and collaboration agreement with Takeda to commercialize rusfertide; and JNJ Innovative Medicines to co-develop Interleukin-23 receptor antagonist compound JNJ-2113. Protagonist Therapeutics, Inc. was incorporated in 2006 and is headquartered in Newark, California.

About Sutro Biopharma

Sutro Biopharma, Inc. operates as a clinical-stage oncology company. The company develops site-specific and novel-format antibody drug conjugates (ADCs) that enables its proprietary integrated cell-free protein synthesis platform, XpressCF and XpressCF+. Its product candidates include STRO-002, an ADC directed against folate receptor-alpha, which is in Phase II/III clinical trials for patients with ovarian and endometrial cancers; VAX-24 and Vax-31 pneumococcal conjugate vaccine candidates that is in Phase II/III clinical trials for the treatment of invasive pneumococcal disease; and MK-1484, a distinct cytokine derivative molecule that is in Phase I clinical study for the treatment of cancer. The company's pre-clinical product candidates include STRO-003, an ADC directed against an anti-receptor tyrosine kinase-like orphan receptor 1 (ROR1) for the treatment of solid tumors and hematological cancers; and STRO-004, a tissue factor (TF) targeting ADC for the treatment of TF-expressing solid tumors, including cervical, lung, and breast cancer. Sutro Biopharma, Inc. has collaboration and license agreements with Merck Sharp & Dohme Corporation to develop research programs focusing on cytokine derivatives for cancer and autoimmune disorders; Vaxcyte to discover and develop vaccine candidates for the treatment or prophylaxis of infectious diseases; Tasly Biopharmaceuticals Co., Ltd. to develop and commercialize STRO-002 in Greater China; EMD Serono to develop ADCs for multiple cancer targets; and Astellas Pharma Inc. to develop immunostimulatory ADC. The company was formerly known as Fundamental Applied Biology, Inc. Sutro Biopharma, Inc. was incorporated in 2003 and is headquartered in South San Francisco, California.