Menlo Therapeutics (NASDAQ:MNLO) and SUMMIT THERAPEU/S (NASDAQ:SMMT) Head-To-Head Analysis

SUMMIT THERAPEU/S (NASDAQ:SMMT) and Menlo Therapeutics (NASDAQ:MNLO) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Analyst Recommendations

This is a summary of current ratings and price targets for SUMMIT THERAPEU/S and Menlo Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SUMMIT THERAPEU/S 0 1 1 0 2.50
Menlo Therapeutics 0 0 2 0 3.00

SUMMIT THERAPEU/S currently has a consensus price target of $2.00, indicating a potential upside of 26.58%. Menlo Therapeutics has a consensus price target of $18.00, indicating a potential upside of 237.08%. Given Menlo Therapeutics’ stronger consensus rating and higher probable upside, analysts plainly believe Menlo Therapeutics is more favorable than SUMMIT THERAPEU/S.

Risk and Volatility

SUMMIT THERAPEU/S has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Menlo Therapeutics has a beta of 2.08, meaning that its stock price is 108% more volatile than the S&P 500.

Valuation & Earnings

This table compares SUMMIT THERAPEU/S and Menlo Therapeutics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SUMMIT THERAPEU/S $56.50 million 0.90 $9.99 million $0.84 1.88
Menlo Therapeutics $10.64 million 12.25 -$51.44 million ($2.37) -2.25

SUMMIT THERAPEU/S has higher revenue and earnings than Menlo Therapeutics. Menlo Therapeutics is trading at a lower price-to-earnings ratio than SUMMIT THERAPEU/S, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares SUMMIT THERAPEU/S and Menlo Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SUMMIT THERAPEU/S -2,107.69% -59.95% -42.26%
Menlo Therapeutics N/A -64.15% -58.51%

Institutional & Insider Ownership

8.2% of SUMMIT THERAPEU/S shares are owned by institutional investors. Comparatively, 74.4% of Menlo Therapeutics shares are owned by institutional investors. 5.5% of Menlo Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Menlo Therapeutics beats SUMMIT THERAPEU/S on 8 of the 14 factors compared between the two stocks.

SUMMIT THERAPEU/S Company Profile

Summit Therapeutics plc, a biopharmaceutical company, focuses on the discovery, development, and commercialization of novel medicines to treat rare and infectious diseases in the United Kingdom and North America. It is conducting clinical programmes focused on the genetic disease Duchenne muscular dystrophy (DMD) and the infectious disease Clostridium difficile infection (CDI). The company's lead DMD product candidate is ezutromid, an orally administered small molecule, which is in Phase II clinical trial; and lead CDI product candidate is ridinilazole, an orally administered small molecule antibiotic that has completed Phase II clinical trials. It has strategic alliance with the University of Oxford to develop utrophin modulators. The company was formerly known as Summit Corporation plc and changed its name to Summit Therapeutics plc in February 2015. Summit Therapeutics plc was founded in 2003 and is based in Abingdon, the United Kingdom.

Menlo Therapeutics Company Profile

Menlo Therapeutics Inc., a late-stage biopharmaceutical company, focuses on the development and commercialization of serlopitant for the treatment of pruritus associated with dermatologic conditions in the United States. The company has completed Phase II clinical trials in pruritus associated with prurigo nodularis; psoriasis; chronic pruritus; atopic dermatitis; and refractory chronic cough. The company was formerly known as Tigercat Pharma, Inc. and changed its name to Menlo Therapeutics Inc. in May 2016. Menlo Therapeutics Inc. was founded in 2011 and is headquartered in Redwood City, California.

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