Ardelyx (NASDAQ:ARDX) vs. Biofrontera (NASDAQ:BFRI) Financial Analysis

Biofrontera (NASDAQ:BFRI) and Ardelyx (NASDAQ:ARDX) are both small-cap healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Biofrontera	$41.71 million	0.43	-$10.54 million	($0.45)	-2.69
Ardelyx	$407.32 million	2.07	-$61.60 million	($0.22)	-15.41

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

Analyst Ratings

This is a breakdown of recent ratings for Biofrontera and Ardelyx, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Biofrontera	1	1	1	0	2.00
Ardelyx	2	0	9	1	2.75

Ardelyx has a consensus price target of $13.90, indicating a potential upside of 310.03%. Given Ardelyx’s stronger consensus rating and higher probable upside, analysts plainly believe Ardelyx is more favorable than Biofrontera.

Insider and Institutional Ownership

10.1% of Biofrontera shares are held by institutional investors. Comparatively, 58.9% of Ardelyx shares are held by institutional investors. 8.1% of Biofrontera shares are held by company insiders. Comparatively, 5.3% of Ardelyx shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Biofrontera and Ardelyx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Biofrontera	-13.78%	-145.81%	-31.30%
Ardelyx	-12.35%	-36.00%	-10.77%

Volatility & Risk

Biofrontera has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, Ardelyx has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Summary

Ardelyx beats Biofrontera on 11 of the 15 factors compared between the two stocks.

About Biofrontera

Biofrontera Inc., a biopharmaceutical company, engages in the commercialization of pharmaceutical products for the treatment of dermatological conditions in the United States. The company's products are used for the treatment of actinic keratoses, which are pre-cancerous skin lesions, as well as impetigo, a bacterial skin infection. It offers Ameluz, a prescription drug for use in combination with the RhodoLED lamp series, for photodynamic therapy for the lesion-directed and field-directed treatment of actinic keratosis of mild-to-moderate severity on the face and scalp. The company also provides Xepi, a topical non-fluorinated quinolone that inhibits bacterial growth for the treatment of impetigo. The company was incorporated in 2015 and is headquartered in Woburn, Massachusetts.

About Ardelyx

Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.