Financial Analysis: Applied Genetic Technologies Corporation (AGTC) and Ophthotech Corporation (OPHT)

Applied Genetic Technologies Corporation (NASDAQ: AGTC) and Ophthotech Corporation (NASDAQ:OPHT) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Insider & Institutional Ownership

53.0% of Applied Genetic Technologies Corporation shares are owned by institutional investors. Comparatively, 61.4% of Ophthotech Corporation shares are owned by institutional investors. 5.6% of Applied Genetic Technologies Corporation shares are owned by company insiders. Comparatively, 2.0% of Ophthotech Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Applied Genetic Technologies Corporation and Ophthotech Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Genetic Technologies Corporation 0 1 5 0 2.83
Ophthotech Corporation 0 12 0 0 2.00

Applied Genetic Technologies Corporation currently has a consensus price target of $10.17, indicating a potential upside of 154.17%. Ophthotech Corporation has a consensus price target of $10.00, indicating a potential upside of 189.86%. Given Ophthotech Corporation’s higher possible upside, analysts plainly believe Ophthotech Corporation is more favorable than Applied Genetic Technologies Corporation.

Earnings & Valuation

This table compares Applied Genetic Technologies Corporation and Ophthotech Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Applied Genetic Technologies Corporation $39.47 million 1.83 $400,000.00 ($0.20) -20.00
Ophthotech Corporation $50.91 million 2.44 -$193.42 million $1.57 2.20

Applied Genetic Technologies Corporation has higher revenue, but lower earnings than Ophthotech Corporation. Applied Genetic Technologies Corporation is trading at a lower price-to-earnings ratio than Ophthotech Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Applied Genetic Technologies Corporation has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Ophthotech Corporation has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.

Profitability

This table compares Applied Genetic Technologies Corporation and Ophthotech Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Genetic Technologies Corporation -8.78% -2.86% -2.18%
Ophthotech Corporation 26.69% -69.40% 24.91%

Summary

Ophthotech Corporation beats Applied Genetic Technologies Corporation on 7 of the 13 factors compared between the two stocks.

About Applied Genetic Technologies Corporation

Applied Genetic Technologies Corporation is a clinical-stage biotechnology company. The Company develops gene therapy products designed to manage the lives of patients with severe diseases in ophthalmology. As of March 31, 2016, its product candidates included treatments for X-linked retinoschisis (XLRS), over two forms of achromatopsia (ACHM) and X-linked retinitis pigmentosa (XLRP). As of March 31, 2016, the Company was engaged in developing three discovery programs, targeting three indications based on its adeno-associated virus vector technologies. XLRS is an inherited retinal degenerative disease caused by mutations in the retinoschisis1 (RS1) gene. Achromatopsia is an inherited condition that is associated with visual acuity loss, extreme light sensitivity resulting in daytime blindness, and reduced or complete loss of color discrimination, achromatopsia is caused by mutations in any of several genes. The Company is also developing Alpha-1 Antitrypsin Deficiency (Alpha 1).

About Ophthotech Corporation

Ophthotech Corporation is a biopharmaceutical company. The Company is engaged in the development of therapeutics to treat ophthalmic diseases, with a focus on diseases of the back of the eye. Its primary focus is developing therapeutics for age-related macular degeneration (AMD), which is a disorder of the central portion of the retina, known as the macula, that may result in blindness. Its product candidates include Fovista and Zimura. Fovista is designed to target platelet derived growth factor (PDGF) in combination with anti-vascular endothelial growth factor (VEGF) drugs to disrupt the formation of abnormal new blood vessels in wet AMD. Zimura targets complement factor C5, a central component of the complement cascade. The Company has initiated a Phase II/III clinical trial investigating Zimura for treatment of geographic atrophy.

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