Comparing Gemphire Therapeutics (GEMP) and Otonomy (OTIC)

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

Profitability

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This table compares Otonomy and Gemphire Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Otonomy -7,292.07% -63.35% -58.51%
Gemphire Therapeutics N/A -216.63% -125.70%

Valuation & Earnings

This table compares Otonomy and Gemphire Therapeutics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Otonomy $1.24 million 99.88 -$90.13 million ($2.97) -1.36
Gemphire Therapeutics N/A N/A -$33.41 million ($3.23) -1.89

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

Institutional & Insider Ownership

71.6% of Otonomy shares are owned by institutional investors. Comparatively, 19.8% of Gemphire Therapeutics shares are owned by institutional investors. 12.7% of Otonomy shares are owned by insiders. Comparatively, 34.0% of Gemphire Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Otonomy has a beta of 3.13, suggesting that its stock price is 213% more volatile than the S&P 500. Comparatively, Gemphire Therapeutics has a beta of 4.07, suggesting that its stock price is 307% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Otonomy and Gemphire Therapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Otonomy 1 0 3 0 2.50
Gemphire Therapeutics 0 0 5 0 3.00

Otonomy currently has a consensus price target of $10.00, indicating a potential upside of 146.91%. Gemphire Therapeutics has a consensus price target of $25.80, indicating a potential upside of 323.65%. Given Gemphire Therapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Gemphire Therapeutics is more favorable than Otonomy.

Summary

Gemphire Therapeutics beats Otonomy on 7 of the 13 factors compared between the two stocks.

Otonomy Company Profile

Otonomy, Inc., a biopharmaceutical company, engages in the development and commercialization of therapeutics for otology in the United States. It offers OTIPRIO, a ciprofloxacin otic suspension for use during tympanostomy tube placement surgery in pediatric patients. The company also develops OTIVIDEX, a sustained-exposure formulation of the steroid dexamethasone in Phase III clinical trial for the treatment of Ménière's disease; and OTO- 313, a sustained-exposure formulation of N-methyl-D-aspartate receptor antagonist gacyclidine, which has completed a Phase 1 clinical safety trial for the treatment of tinnitus. In addition, it develops OTO-413, a sustained exposure formulation of brain-derived neurotrophic factor for the repair of cochlear synaptopathy and the treatment of speech-in-noise hearing difficulties; OTO-5XX, an otoprotectant for the prevention of cisplatin-induced hearing loss; and OTO-6XX induces hair cell regeneration for the treatment of severe hearing loss. The company has license agreements with University of California and DURECT Corporation. Otonomy, Inc. was founded in 2008 and is headquartered in San Diego, California.

Gemphire Therapeutics Company Profile

Gemphire Therapeutics Inc., a clinical-stage biopharmaceutical company, focuses on developing and commercializing therapies for the treatment of dyslipidemia cardiovascular disease and nonalcoholic fatty liver disease/non-alcoholic steatohepatitis (NASH). It is developing gemcabene (CI-1027), an oral therapy for patients who are unable to achieve normal levels of LDL-C or triglycerides with currently approved therapies, primarily statin therapy and for those patients who present with NASH. The company is headquartered in Livonia, Michigan.

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