Comparing Recro Pharma (REPH) and Intercept Pharmaceuticals (ICPT)

Recro Pharma (NASDAQ: REPH) and Intercept Pharmaceuticals (NASDAQ:ICPT) are both small-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Institutional & Insider Ownership

65.1% of Recro Pharma shares are owned by institutional investors. Comparatively, 82.7% of Intercept Pharmaceuticals shares are owned by institutional investors. 21.6% of Recro Pharma shares are owned by insiders. Comparatively, 4.5% of Intercept Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Recro Pharma and Intercept Pharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Recro Pharma $69.99 million 2.37 -$13.04 million ($2.21) -3.94
Intercept Pharmaceuticals $70.92 million 21.29 -$361.26 million ($15.50) -3.88

Recro Pharma has higher revenue, but lower earnings than Intercept Pharmaceuticals. Recro Pharma is trading at a lower price-to-earnings ratio than Intercept Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Recro Pharma and Intercept Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Recro Pharma 0 1 4 0 2.80
Intercept Pharmaceuticals 3 9 7 0 2.21

Recro Pharma presently has a consensus target price of $13.50, suggesting a potential upside of 55.17%. Intercept Pharmaceuticals has a consensus target price of $153.85, suggesting a potential upside of 155.78%. Given Intercept Pharmaceuticals’ higher possible upside, analysts clearly believe Intercept Pharmaceuticals is more favorable than Recro Pharma.

Risk and Volatility

Recro Pharma has a beta of -0.53, suggesting that its stock price is 153% less volatile than the S&P 500. Comparatively, Intercept Pharmaceuticals has a beta of -2.1, suggesting that its stock price is 310% less volatile than the S&P 500.

Profitability

This table compares Recro Pharma and Intercept Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Recro Pharma -46.75% -56.04% -19.40%
Intercept Pharmaceuticals -543.35% -135.24% -54.37%

Summary

Recro Pharma beats Intercept Pharmaceuticals on 8 of the 13 factors compared between the two stocks.

Recro Pharma Company Profile

Recro Pharma, Inc. is a clinical-stage specialty pharmaceutical company. The Company is engaged in developing products for hospitals and ambulatory care settings that is developing non-opioid products for treatment of serious acute pain. The Company’s lead product candidate is an injectable form of meloxicam. Its product candidates for pain indications include injectable meloxicam, a product candidate in development for the treatment of acute post-operative pain; Dex-IN, a product candidate under development for the treatment of post-operative pain; Dex-SL, a product candidate for the treatment of chronic pain, and Fadolmidine (Fado), a product candidate used by injection into the spine for pain associated with surgery or certain types of chronic pain and which the Company pursues as a topical product for local application to treat serious pain associated with nerve damage to local tissues (neuropathies), especially of the lower extremities, which can occur in diabetic patients.

Intercept Pharmaceuticals Company Profile

Intercept Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of therapeutics to treat non-viral, progressive liver diseases. The Company’s product candidates have the potential to treat orphan and more prevalent diseases for which there are limited therapeutic solutions. The Company’s product candidate, obeticholic acid (OCA), is a bile acid analog, a chemical substance that has a structure based on a naturally occurring human bile acid that selectively binds to and activates the farnesoid X receptor (FXR). In addition to OCA, it is developing other bile acid analog compounds targeting FXR and a second dedicated bile acid receptor called TGR5, which is a target of interest for the treatment of type 2 diabetes and other gastrointestinal indications. The Company is also developing other products INT-767 for the treatment of fibrosis and INT-777 for the treatment of type 2 diabetes.

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