Financial Analysis: NewLink Genetics (NLNK) & Compugen (CGEN)

NewLink Genetics (NASDAQ: NLNK) and Compugen (NASDAQ:CGEN) are both small-cap healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Profitability

This table compares NewLink Genetics and Compugen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NewLink Genetics -229.19% -63.39% -47.83%
Compugen N/A -70.91% -60.92%

Risk and Volatility

NewLink Genetics has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Compugen has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for NewLink Genetics and Compugen, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NewLink Genetics 0 0 6 0 3.00
Compugen 0 0 1 0 3.00

NewLink Genetics currently has a consensus price target of $25.67, indicating a potential upside of 204.11%. Compugen has a consensus price target of $14.00, indicating a potential upside of 418.52%. Given Compugen’s higher possible upside, analysts clearly believe Compugen is more favorable than NewLink Genetics.

Insider & Institutional Ownership

52.6% of NewLink Genetics shares are owned by institutional investors. Comparatively, 17.4% of Compugen shares are owned by institutional investors. 13.7% of NewLink Genetics shares are owned by company insiders. Comparatively, 9.5% of Compugen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares NewLink Genetics and Compugen’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NewLink Genetics $35.77 million 8.75 -$85.15 million ($2.44) -3.46
Compugen $710,000.00 194.44 -$31.50 million ($0.71) -3.80

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

Summary

NewLink Genetics beats Compugen on 8 of the 13 factors compared between the two stocks.

NewLink Genetics Company Profile

NewLink Genetics Corporation is a clinical-stage immuno-oncology company focused on discovering, developing and commercializing immunotherapeutic products for the treatment of cancer. The Company’s portfolio includes biologic and small-molecule immunotherapy product candidates for a range of oncology indications. Its biologic product candidates are based on its HyperAcute Cellular Immunotherapy technology, which is designed to stimulate the human immune system to attack cancer cells. Its additional HyperAcute Cellular Immunotherapy product candidates in clinical development include tergenpumatucel-L and dorgenmeltucel-L for patients with advanced lung cancer and melanoma, respectively. Additionally, it has two small-molecule product candidates in clinical development: GDC-0919 and indoximod. These product candidates are indoleamine-2, 3-dioxygenase (IDO) pathway inhibitors and focus on breaking the immune system’s tolerance to cancer.

Compugen Company Profile

Compugen Ltd. is a therapeutic discovery company. The Company focuses on infrastructure to discover drug targets and develop therapeutics. The Company is engaged in the research, development and commercialization of therapeutic and product candidates. The Company’s pipeline primarily consists of early and preclinical stage immuno-oncology programs based on drug targets discovered by the Company, primarily immune checkpoint and myeloid protein target candidates. These programs are focused on the development of cancer immunotherapy drugs with potential to harness the immune system to provide treatment solutions in areas of unmet medical needs in various cancer types and patient populations, both as monotherapy and in combination with other drugs. Its pipeline also includes a preclinical stage fusion protein autoimmune product candidate. Its fields of focus are oncology and immunology, with emphasis on its discovery capabilities on immuno-oncology.

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