Critical Analysis: Luna Innovations (LUNA) vs. Redpoint Bio (RPBC)

Luna Innovations (NASDAQ:LUNA) and Redpoint Bio (OTCMKTS:RPBC) are both small-cap business services companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Risk and Volatility

Luna Innovations has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Redpoint Bio has a beta of -0.58, meaning that its share price is 158% less volatile than the S&P 500.

Profitability

This table compares Luna Innovations and Redpoint Bio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luna Innovations 20.93% 6.18% 4.89%
Redpoint Bio N/A N/A N/A

Valuation & Earnings

This table compares Luna Innovations and Redpoint Bio’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luna Innovations $46.23 million 2.07 $14.61 million N/A N/A
Redpoint Bio N/A N/A N/A N/A N/A

Luna Innovations has higher revenue and earnings than Redpoint Bio.

Analyst Recommendations

This is a summary of recent ratings and target prices for Luna Innovations and Redpoint Bio, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luna Innovations 0 1 1 0 2.50
Redpoint Bio 0 0 0 0 N/A

Luna Innovations presently has a consensus target price of $4.00, suggesting a potential upside of 16.62%.

Institutional & Insider Ownership

23.9% of Luna Innovations shares are held by institutional investors. 10.6% of Luna Innovations shares are held by insiders. Comparatively, 11.5% of Redpoint Bio shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Luna Innovations beats Redpoint Bio on 7 of the 8 factors compared between the two stocks.

Luna Innovations Company Profile

Luna Innovations Incorporated develops, manufactures, and markets fiber optic sensing, and test and measurement products worldwide. It operates in two segments, Products and Licensing, and Technology Development. The Products and Licensing segment offers fiber optic sensing products, as well as test and measurement products to monitor the integrity of fiber optic network components and sub-assemblies, which include optical vector analyzer, optical backscatter reflectometers, and the Phoenix family of tunable lasers; and distributed sensing systems comprising optical distributed sensor interrogator sensing solution with multiple sensors whose inputs are integrated through a fiber optic network and software. This segment also offers optoelectronic solutions for various applications, such as metrology, missile guidance, flame monitoring, temperature sensing, particle detection, color sensing, infrared detection, and other applications; and terahertz sensing systems, which are used to measure and verify physical properties online and in real-time. In addition, this segment conducts applied research in the fiber optic sensing area for corporate and government customers. The Technology Development segment provides applied research for customers principally in the areas of sensing and instrumentation, advanced materials, and health sciences. The company sells its products to telecommunications companies, defense agencies, government system integrators, researchers, original equipment manufacturers, distributors, testing labs, and strategic partners directly, as well as through manufacturer representative organizations, partner and distribution channels, technical sales engineers, value added resellers, and independent sales representatives. Luna Innovations Incorporated was founded in 1990 and is headquartered in Roanoke, Virginia.

Redpoint Bio Company Profile

Redpoint Bio Corporation, a development stage biotechnology company, focuses on the development of healthier foods and new approaches for the treatment of diabetes and obesity by understanding the biology of taste and its relationship to metabolism, satiety, and diabetes. It enters into a license and commercialization agreement with International Flavors and Fragrances Inc. for the development, manufacture, use, and commercialization of RP44, which is a component of the stevia plant that works as a sweetness enhancer amplifying the existing sugary sweetness in a food or beverage. The company is based in Philadelphia, Pennsylvania.

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