Comparing Flex Pharma (FLKS) and Ophthotech (OPHT)

Flex Pharma (NASDAQ: FLKS) and Ophthotech (NASDAQ:OPHT) are both small-cap healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Insider & Institutional Ownership

27.3% of Flex Pharma shares are owned by institutional investors. Comparatively, 62.5% of Ophthotech shares are owned by institutional investors. 45.4% of Flex Pharma shares are owned by company insiders. Comparatively, 2.0% of Ophthotech shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Flex Pharma and Ophthotech’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Flex Pharma $1.01 million 75.44 -$39.49 million ($2.02) -2.10
Ophthotech $50.91 million 1.98 -$193.42 million $1.56 1.79

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

Profitability

This table compares Flex Pharma and Ophthotech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flex Pharma -2,655.19% -71.39% -65.49%
Ophthotech 26.69% -69.40% 24.91%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Flex Pharma and Ophthotech, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flex Pharma 0 1 3 0 2.75
Ophthotech 0 1 0 0 2.00

Flex Pharma presently has a consensus target price of $10.50, indicating a potential upside of 147.64%. Ophthotech has a consensus target price of $4.00, indicating a potential upside of 43.37%. Given Flex Pharma’s stronger consensus rating and higher possible upside, research analysts plainly believe Flex Pharma is more favorable than Ophthotech.

Summary

Ophthotech beats Flex Pharma on 7 of the 13 factors compared between the two stocks.

Flex Pharma Company Profile

Flex Pharma, Inc. is a biotechnology company. The Company develops treatments for nocturnal leg cramps, muscle cramps and spasms associated with severe neuromuscular conditions, and exercise associated muscle cramps (EAMCs). The Company’s product candidates activate certain receptors in primary sensory neurons, which then act through neuronal circuits to reduce the repetitive firing, or hyperexcitability, of alpha-motor neurons in the spinal cord, thereby preventing or reducing the frequency and intensity of muscle cramps and spasms. The Company operates through developing and commercializing products for nocturnal leg cramps, muscle cramps, spasms and spasticity associated with severe neuromuscular conditions, and exercise-associated muscle cramps segment. The Company’s lead drug product candidate is FLX-787, which is in the Phase II clinical trial stage. It is developing a consumer brand and products specifically formulated to treat athletes suffering from EAMCs.

Ophthotech Company Profile

Ophthotech Corporation is a biopharmaceutical company. The Company is engaged in the development of therapeutics to treat ophthalmic diseases, with a focus on diseases of the back of the eye. Its primary focus is developing therapeutics for age-related macular degeneration (AMD), which is a disorder of the central portion of the retina, known as the macula, that may result in blindness. Its product candidates include Fovista and Zimura. Fovista is designed to target platelet derived growth factor (PDGF) in combination with anti-vascular endothelial growth factor (VEGF) drugs to disrupt the formation of abnormal new blood vessels in wet AMD. Zimura targets complement factor C5, a central component of the complement cascade. The Company has initiated a Phase II/III clinical trial investigating Zimura for treatment of geographic atrophy.

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