Analyzing Sangamo Therapeutics (NASDAQ:SGMO) and Reata Pharmaceuticals (RETA)

Reata Pharmaceuticals (NASDAQ: RETA) and Sangamo Therapeutics (NASDAQ:SGMO) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Analyst Ratings

This is a summary of current ratings for Reata Pharmaceuticals and Sangamo Therapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reata Pharmaceuticals 0 0 8 0 3.00
Sangamo Therapeutics 0 2 3 0 2.60

Reata Pharmaceuticals presently has a consensus target price of $54.71, suggesting a potential upside of 80.69%. Sangamo Therapeutics has a consensus target price of $15.00, suggesting a potential upside of 20.97%. Given Reata Pharmaceuticals’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Reata Pharmaceuticals is more favorable than Sangamo Therapeutics.

Profitability

This table compares Reata Pharmaceuticals and Sangamo Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Reata Pharmaceuticals -46.89% N/A -27.08%
Sangamo Therapeutics -246.39% -38.49% -30.67%

Earnings & Valuation

This table compares Reata Pharmaceuticals and Sangamo Therapeutics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Reata Pharmaceuticals $50.09 million 15.78 -$22.97 million ($1.07) -28.30
Sangamo Therapeutics $23.42 million 44.27 -$57.47 million ($0.81) -15.31

Reata Pharmaceuticals has higher revenue and earnings than Sangamo Therapeutics. Reata Pharmaceuticals is trading at a lower price-to-earnings ratio than Sangamo Therapeutics, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

15.6% of Reata Pharmaceuticals shares are owned by institutional investors. Comparatively, 63.5% of Sangamo Therapeutics shares are owned by institutional investors. 62.4% of Reata Pharmaceuticals shares are owned by company insiders. Comparatively, 5.5% of Sangamo Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Reata Pharmaceuticals has a beta of -2.17, meaning that its stock price is 317% less volatile than the S&P 500. Comparatively, Sangamo Therapeutics has a beta of 3.14, meaning that its stock price is 214% more volatile than the S&P 500.

Summary

Reata Pharmaceuticals beats Sangamo Therapeutics on 9 of the 13 factors compared between the two stocks.

About Reata Pharmaceuticals

Reata Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on identifying, developing and commercializing product candidates that modulate the activity of regulatory proteins involved in the biology of mitochondrial function, oxidative stress, and inflammation to address the unmet medical needs of patients with a range of serious or life-threatening diseases. The Company’s lead product candidates include bardoxolone methyl, which is being studied in Phase III trial for the treatment of pulmonary arterial hypertension (PAH), associated with connective tissue disease (CTD-PAH), as well as a Phase II trial for the treatment of pulmonary hypertension due to interstitial lung disease (PH-ILD), and PAH, each of which are subsets of pulmonary hypertension (PH), Omaveloxolone, which is in Phase II clinical development for the treatment of multiple diseases, including Friedreich’s ataxia, mitochondrial myopathies and metastatic melanoma.

About Sangamo Therapeutics

Sangamo Therapeutics, Inc., formerly Sangamo BioSciences, Inc., is a clinical-stage biotechnology company. The Company is focused on translating science into genomic therapies that transform patients’ lives using the Company’s platform technologies in genome editing, gene therapy, gene regulation and cell therapy. The Company has clinical and preclinical programs in development and partnered certain programs with biopharmaceutical companies to expedite clinical and commercial development. The focus for its Company is the development of human therapeutics. The Company’s product pipeline includes SB-525, SB-FIX, SB-318, SB-913, SB-728-T and SB-728-HSPC. The Company has initiated a Phase I/II clinical trial evaluating its zinc finger nuclease (ZFN) in vivo genome editing approach for the treatment of hemophilia B. In the development of its ZFP technology platform, it is focusing its resources on product development for therapeutic use in humans and on its non-therapeutic applications.

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