Financial Review: Cellular Dynamics International (ICEL) vs. Foundation Medicine (FMI)

Cellular Dynamics International (NASDAQ: ICEL) and Foundation Medicine (NASDAQ:FMI) are both healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Analyst Recommendations

This is a summary of current recommendations and price targets for Cellular Dynamics International and Foundation Medicine, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cellular Dynamics International 0 0 0 0 N/A
Foundation Medicine 0 2 3 0 2.60

Foundation Medicine has a consensus price target of $58.25, indicating a potential downside of 23.10%. Given Foundation Medicine’s higher probable upside, analysts plainly believe Foundation Medicine is more favorable than Cellular Dynamics International.

Insider and Institutional Ownership

30.9% of Foundation Medicine shares are owned by institutional investors. 2.7% of Foundation Medicine 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.

Profitability

This table compares Cellular Dynamics International and Foundation Medicine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cellular Dynamics International -88.12% -57.59% -38.09%
Foundation Medicine -119.69% -143.18% -93.58%

Earnings & Valuation

This table compares Cellular Dynamics International and Foundation Medicine’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cellular Dynamics International N/A N/A N/A ($1.94) -8.53
Foundation Medicine $116.86 million 23.50 -$113.19 million ($4.47) -16.95

Cellular Dynamics International has higher earnings, but lower revenue than Foundation Medicine. Foundation Medicine is trading at a lower price-to-earnings ratio than Cellular Dynamics International, indicating that it is currently the more affordable of the two stocks.

About Cellular Dynamics International

Cellular Dynamics International, Inc. develops and produces functioning human cells in industrial quantities. The Company’s products include true human cells in multiple cell types (iCell products), human induced pluripotent stem cells (iPSCs) and custom iPSCs and iCell products (MyCell products). It markets its products for use in life science in vitro research and development, as well as applied product testing, stem cell banking and in vivo cellular therapeutics. It is also in the process of developing human cells as cellular therapeutics. The market for in vitro drug discovery, toxicity testing and applied testing, including chemical safety, has employed models, such as primary cells, transformed (immortalized) cells and live animals that act as surrogates for functioning human cells. Its iCell and MyCell products consist of iCell Cardiomyocytes, iCell Neurons, iCell DopaNeurons, iCell Endothelial Cells, iCell Hepatocytes, MyCell and Media and reprogramming kit.

About Foundation Medicine

Foundation Medicine, Inc. is a molecular information company. The Company sells products that are enabled by its molecular information platform to physicians and biopharmaceutical companies. It is engaged in the business of delivering molecular information about cancer to its customers. Its platform includes various methods and algorithms for analyzing specimens across various types of cancer. Its suite of clinical molecular information products includes FoundationOne, which is used for solid tumors; FoundationOne Heme, which is used for blood-based cancers or hematologic malignancies, including leukemia, lymphoma, myeloma, pediatric cancers and advanced sarcoma; FoundationACT (Assay for Circulating Tumor DNA), which is a blood-based (liquid biopsy) assay that evaluates circulating tumor deoxyribonucleic acid (ctDNA), and FoundationFocus CDxBRCA, which is a companion diagnostic assay to aid in identifying women with ovarian cancer for whom treatment with Rubraca (rucaparib).

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