Critical Contrast: Epizyme (EPZM) & Aldeyra Therapeutics (ALDX)

Epizyme (NASDAQ: EPZM) and Aldeyra Therapeutics (NASDAQ:ALDX) are both small-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Epizyme and Aldeyra Therapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Epizyme 0 0 11 0 3.00
Aldeyra Therapeutics 0 0 5 0 3.00

Epizyme currently has a consensus target price of $24.25, indicating a potential upside of 44.35%. Aldeyra Therapeutics has a consensus target price of $19.40, indicating a potential upside of 210.40%. Given Aldeyra Therapeutics’ higher probable upside, analysts clearly believe Aldeyra Therapeutics is more favorable than Epizyme.

Volatility and Risk

Epizyme has a beta of 2.22, suggesting that its share price is 122% more volatile than the S&P 500. Comparatively, Aldeyra Therapeutics has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Profitability

This table compares Epizyme and Aldeyra Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Epizyme N/A -63.10% -49.92%
Aldeyra Therapeutics N/A -80.41% -70.58%

Earnings and Valuation

This table compares Epizyme and Aldeyra Therapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Epizyme $17.06 million 57.57 -$120.12 million ($2.06) -8.16
Aldeyra Therapeutics N/A N/A -$19.82 million ($1.46) -4.28

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

Institutional and Insider Ownership

72.2% of Epizyme shares are owned by institutional investors. Comparatively, 40.3% of Aldeyra Therapeutics shares are owned by institutional investors. 25.2% of Epizyme shares are owned by insiders. Comparatively, 28.4% of Aldeyra Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Epizyme beats Aldeyra Therapeutics on 6 of the 10 factors compared between the two stocks.

About Epizyme

Epizyme, Inc. is a clinical-stage biopharmaceutical company. The Company discovers, develops and plans to commercialize epigenetic therapies for cancer patients. The Company is engaged in the discovery and development of novel epigenetic therapies for cancer patients. The Company develops small molecule inhibitors of a class of enzymes known as histone methyltransferases (HMTs). The Company develops small molecule inhibitors of other chromatin modifying proteins (CMPs). The Company’s lead product candidate, tazemetostat, is a potent and selective inhibitor of the enhancer of zeste homolog 2 (EZH2) histone methyltransferases (HMT), an enzyme that plays an important role in various cancers. The Company is evaluating tazemetostat in a Phase II study in adults with relapsed or refractory non-Hodgkin lymphoma (NHL), and one Phase I study in children with molecularly defined solid tumors. The Company owns the global development and commercialization rights to tazemetostat outside of Japan.

About Aldeyra Therapeutics

Aldeyra Therapeutics, Inc., formerly Aldexa Therapeutics, Inc., is a biotechnology company. The Company’s principal activities include raising capital and research and development activities. The Company’s segment is the identification and development of a treatment for diseases related to high levels of aldehydes. The Company is focused on the development of products for diseases caused by inflammation and inborn errors of metabolism that are caused by naturally occurring toxic and pro-inflammatory chemical species known as aldehydes. The Company has developed a series of aldehyde traps, molecules that are designed to sequester and allow for the degradation of aldehydes. The Company’s aldehyde trap, NS2, is a product candidate that is under development for the treatment of allergic conjunctivitis and related rare allergic ocular diseases, noninfectious anterior uveitis, sjogren-larsson syndrome (SLS) and succinic semi-aldehyde dehydrogenase deficiency.

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