Critical Contrast: Avedro (NASDAQ:AVDR) versus Puma Biotechnology (NASDAQ:PBYI)

Avedro (NASDAQ:AVDR) and Puma Biotechnology (NASDAQ:PBYI) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Profitability

This table compares Avedro and Puma Biotechnology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avedro N/A N/A N/A
Puma Biotechnology -32.23% -254.09% -34.83%

Valuation and Earnings

This table compares Avedro and Puma Biotechnology’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avedro $27.67 million 16.13 -$25.12 million ($17.97) -1.45
Puma Biotechnology $251.00 million 1.81 -$113.57 million ($2.99) -3.90

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

Institutional & Insider Ownership

69.2% of Avedro shares are owned by institutional investors. Comparatively, 87.7% of Puma Biotechnology shares are owned by institutional investors. 21.8% of Puma Biotechnology shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Avedro and Puma Biotechnology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avedro 0 4 2 0 2.33
Puma Biotechnology 3 7 0 0 1.70

Avedro currently has a consensus target price of $23.60, indicating a potential downside of 9.37%. Puma Biotechnology has a consensus target price of $19.25, indicating a potential upside of 65.09%. Given Puma Biotechnology’s higher probable upside, analysts clearly believe Puma Biotechnology is more favorable than Avedro.

Summary

Avedro beats Puma Biotechnology on 8 of the 13 factors compared between the two stocks.

Avedro Company Profile

Avedro, Inc., an ophthalmic pharmaceutical and medical device company, develops and commercializes products to treat ophthalmic disorders and conditions, primarily associated with corneal weakness. The company's Avedro Corneal Remodeling platform comprises KXL and Mosaic systems, which deliver ultraviolet A or UVA light, and a suite of single-use riboflavin drug formulations. Its Avedro Corneal Remodeling platform treats corneal ectatic disorders and corrects refractive conditions; and KXL system in combination with Photrexa drug formulations used for the treatment of progressive keratoconus and corneal ectasia following refractive surgery. Avedro sells its products through a direct sales force in the United States and through medical device distributors internationally. The company was formerly known as ThermalVision, Inc. and changed its name to Avedro, Inc. in October 2005. Avedro, Inc. was incorporated in 2002 and is headquartered in Waltham, Massachusetts.

Puma Biotechnology Company Profile

Puma Biotechnology, Inc., a biopharmaceutical company, focuses on the development and commercialization of products to enhance cancer care. Its drug candidates include PB272 neratinib (oral) for the treatment of early stage breast cancer, metastatic breast cancer, non-small cell lung cancer, HER2 mutation-positive solid tumors, and HER2-mutated non-amplified breast cancer; and PB272 neratinib (intravenous). The company also develops PB357, an orally administered agent that is an irreversible tyrosine kinase inhibitor that blocks signal transduction through the epidermal growth factor receptors, HER1, HER2, and HER4. It has a license agreement with Pfizer, Inc. for the development, manufacture, and commercialization of PB272 neratinib (oral), PB272 neratinib (intravenous), PB357, and certain related compounds. Puma Biotechnology, Inc. was founded in 2010 and is headquartered in Los Angeles, California.

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