Analyzing Forte Biosciences (NASDAQ:FBRX) & Phathom Pharmaceuticals (NASDAQ:PHAT)

Forte Biosciences (NASDAQ:FBRX) and Phathom Pharmaceuticals (NASDAQ:PHAT) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

77.6% of Forte Biosciences shares are owned by institutional investors. Comparatively, 99.0% of Phathom Pharmaceuticals shares are owned by institutional investors. 4.4% of Forte Biosciences shares are owned by insiders. Comparatively, 9.3% of Phathom Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Forte Biosciences and Phathom Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Forte Biosciences	N/A	-106.17%	-85.50%
Phathom Pharmaceuticals	-76.77%	N/A	-44.29%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Forte Biosciences and Phathom Pharmaceuticals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Forte Biosciences	1	0	3	0	2.50
Phathom Pharmaceuticals	1	0	5	1	2.86

Forte Biosciences currently has a consensus price target of $67.00, indicating a potential upside of 280.90%. Phathom Pharmaceuticals has a consensus price target of $24.50, indicating a potential upside of 122.73%. Given Forte Biosciences’ higher probable upside, analysts plainly believe Forte Biosciences is more favorable than Phathom Pharmaceuticals.

Risk & Volatility

Forte Biosciences has a beta of 2.87, meaning that its share price is 187% more volatile than the S&P 500. Comparatively, Phathom Pharmaceuticals has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Earnings and Valuation

This table compares Forte Biosciences and Phathom Pharmaceuticals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Forte Biosciences	N/A	N/A	-$69.38 million	($4.64)	-3.79
Phathom Pharmaceuticals	$175.11 million	5.01	-$221.25 million	($2.12)	-5.19

Forte Biosciences has higher earnings, but lower revenue than Phathom Pharmaceuticals. Phathom Pharmaceuticals is trading at a lower price-to-earnings ratio than Forte Biosciences, indicating that it is currently the more affordable of the two stocks.

Summary

Phathom Pharmaceuticals beats Forte Biosciences on 9 of the 14 factors compared between the two stocks.

About Forte Biosciences

Forte Biosciences, Inc. operates as a biopharmaceutical company in the United States. The company is developing FB-102 program that addresses various autoimmune diseases, such as graft-versus-host disease, and vitiligo and alopecia areata. Forte Biosciences, Inc. is headquartered in Dallas, Texas.

About Phathom Pharmaceuticals

Phathom Pharmaceuticals, Inc., biopharmaceutical company, focuses on developing and commercializing treatments for gastrointestinal diseases. The company has the rights in the United States, Europe, and Canada for an investigational potassium-competitive acid blocker (P-CAB) that blocks acid secretion in the stomach. It is also developing vonoprazan for the treatment of erosive gastroesophageal reflux disease; and in combination with antibiotics for the treatment of Helicobacter pylori infection. The company was incorporated in 2018 and is headquartered in Florham Park, New Jersey.