Reviewing ESSA Pharma (EPIX) and Avid Bioservices (CDMO)

ESSA Pharma (NASDAQ:EPIX) and Avid Bioservices (NASDAQ:CDMO) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Volatility & Risk

ESSA Pharma has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500. Comparatively, Avid Bioservices has a beta of 2.37, indicating that its stock price is 137% more volatile than the S&P 500.

Insider and Institutional Ownership

66.5% of ESSA Pharma shares are owned by institutional investors. Comparatively, 21.7% of Avid Bioservices shares are owned by institutional investors. 0.9% of Avid Bioservices shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ESSA Pharma and Avid Bioservices, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ESSA Pharma 0 0 2 0 3.00
Avid Bioservices 0 0 5 0 3.00

ESSA Pharma presently has a consensus target price of $0.70, indicating a potential downside of 78.46%. Avid Bioservices has a consensus target price of $8.33, indicating a potential upside of 45.18%. Given Avid Bioservices’ higher probable upside, analysts plainly believe Avid Bioservices is more favorable than ESSA Pharma.

Profitability

This table compares ESSA Pharma and Avid Bioservices’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ESSA Pharma N/A -353.75% -95.76%
Avid Bioservices -57.67% -60.06% -34.12%

Valuation & Earnings

This table compares ESSA Pharma and Avid Bioservices’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ESSA Pharma N/A N/A -$4.72 million ($8.00) -0.41
Avid Bioservices $53.62 million 5.99 -$21.81 million ($0.50) -11.48

ESSA Pharma has higher earnings, but lower revenue than Avid Bioservices. Avid Bioservices is trading at a lower price-to-earnings ratio than ESSA Pharma, indicating that it is currently the more affordable of the two stocks.

Summary

Avid Bioservices beats ESSA Pharma on 8 of the 12 factors compared between the two stocks.

ESSA Pharma Company Profile

ESSA Pharma Inc., a clinical stage pharmaceutical company, focuses on the development of novel therapeutics for the treatment of prostate cancer. It is developing EPI-506 that is in Phase 1/2 clinical trials for the treatment of prostate cancer. The company was founded in 2009 and is headquartered in Vancouver, Canada.

Avid Bioservices Company Profile

Avid Bioservices, Inc., a biologics contract development and manufacturing company, focuses on the development and current Good Manufacturing Practices (cGMP) manufacture of biopharmaceutical products derived from mammalian cell culture. It provides a range of process development, cGMP clinical, and commercial manufacturing services for the biotechnology and biopharmaceutical industries. The company produces monoclonal antibodies and recombinant proteins in batch, fed-batch, and perfusion modes; and offers services, including cGMP clinical and commercial product manufacturing, purification, bulk packaging, stability testing and regulatory strategy, submission, and support. It also provides various process development services, such as cell line development and optimization, cell culture and feed optimization, analytical methods development, and product characterization. The company was formerly known as Peregrine Pharmaceuticals, Inc. and changed its name to Avid Bioservices, Inc. in January 2018. Avid Bioservices, Inc. was founded in 1981 and is headquartered in Tustin, California.

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