Comparing Horizon Pharma (NASDAQ:HZNP) and Akorn (AKRX)

Akorn (NASDAQ: AKRX) and Horizon Pharma (NASDAQ:HZNP) are both mid-cap healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Valuation and Earnings

This table compares Akorn and Horizon Pharma’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Akorn $1.12 billion 3.76 $184.24 million $0.59 56.86
Horizon Pharma $981.12 million 2.54 -$166.83 million ($3.04) -4.99

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

Profitability

This table compares Akorn and Horizon Pharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Akorn 7.79% 15.14% 6.51%
Horizon Pharma -45.28% 20.22% 5.35%

Volatility & Risk

Akorn has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Horizon Pharma has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Institutional and Insider Ownership

73.4% of Akorn shares are owned by institutional investors. Comparatively, 86.6% of Horizon Pharma shares are owned by institutional investors. 28.2% of Akorn shares are owned by company insiders. Comparatively, 3.2% of Horizon Pharma shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Akorn and Horizon Pharma, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Akorn 0 8 0 0 2.00
Horizon Pharma 0 1 10 0 2.91

Akorn presently has a consensus target price of $30.20, suggesting a potential downside of 9.99%. Horizon Pharma has a consensus target price of $19.18, suggesting a potential upside of 26.36%. Given Horizon Pharma’s stronger consensus rating and higher possible upside, analysts clearly believe Horizon Pharma is more favorable than Akorn.

Summary

Akorn beats Horizon Pharma on 9 of the 14 factors compared between the two stocks.

Akorn Company Profile

Akorn Inc. (Akorn), together with its subsidiaries, is a specialty generic pharmaceutical company that develops, manufactures and markets generic and branded prescription pharmaceuticals, as well as private-label over-the-counter (OTC) consumer health products and animal health pharmaceuticals. The Company operates through two segments: Prescription Pharmaceuticals and the Consumer Health. The Prescription Pharmaceuticals segment consists of generic and branded prescription pharmaceuticals in a range of dosage forms, including sterile ophthalmics, injectables and inhalants and non-sterile oral liquids, topicals and nasal sprays and otics. The Consumer Health segment consists of branded and private-label OTC products and animal health products dispensed by veterinary professionals. Its branded and private-label OTC products are focused on ophthalmics, including a dry eye treatment TheraTears Therapy for Your Eyes.

Horizon Pharma Company Profile

Horizon Pharma Public Limited Company is a biopharmaceutical company. The Company is focused on identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs. As of December 31, 2016, the Company marketed 11 medicines through its orphan, rheumatology and primary care business units. The Company’s marketed medicines are ACTIMMUNE (interferon gamma-1b), BUPHENYL (sodium phenylbutyrate) Tablets and Powder, DUEXIS (ibuprofen/famotidine), KRYSTEXXA (pegloticase), MIGERGOT (ergotamine tartrate & caffeine suppositories), PENNSAID (diclofenac sodium topical solution) 2% weight per weight (w/w), or PENNSAID 2%, PROCYSBI (cysteamine bitartrate) delayed-release capsules, QUINSAIR (aerosolized form of levofloxacin), RAVICTI (glycerol phenylbutyrate) Oral Liquid, RAYOS (prednisone) delayed-release tablets and VIMOVO (naproxen/esomeprazole magnesium).

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