Amneal Pharmaceuticals (NASDAQ:AMRX – Get Free Report) and Zai Lab (NASDAQ:ZLAB – Get Free Report) are both mid-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.
Risk and Volatility
Amneal Pharmaceuticals has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Zai Lab has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.
Insider and Institutional Ownership
31.8% of Amneal Pharmaceuticals shares are owned by institutional investors. Comparatively, 41.7% of Zai Lab shares are owned by institutional investors. 26.6% of Amneal Pharmaceuticals shares are owned by company insiders. Comparatively, 13.9% of Zai Lab shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Amneal Pharmaceuticals | 0 | 1 | 4 | 0 | 2.80 |
| Zai Lab | 0 | 0 | 4 | 0 | 3.00 |
Amneal Pharmaceuticals presently has a consensus price target of $9.40, indicating a potential upside of 11.77%. Zai Lab has a consensus price target of $52.50, indicating a potential upside of 69.96%. Given Zai Lab’s stronger consensus rating and higher possible upside, analysts clearly believe Zai Lab is more favorable than Amneal Pharmaceuticals.
Profitability
This table compares Amneal Pharmaceuticals and Zai Lab’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Amneal Pharmaceuticals | -6.72% | 1,235.03% | 4.64% |
| Zai Lab | -92.44% | -37.96% | -29.42% |
Earnings and Valuation
This table compares Amneal Pharmaceuticals and Zai Lab”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Amneal Pharmaceuticals | $2.39 billion | 1.09 | -$83.99 million | ($0.62) | -13.56 |
| Zai Lab | $266.72 million | 11.54 | -$334.62 million | ($3.06) | -10.09 |
Amneal Pharmaceuticals has higher revenue and earnings than Zai Lab. Amneal Pharmaceuticals is trading at a lower price-to-earnings ratio than Zai Lab, indicating that it is currently the more affordable of the two stocks.
Summary
Amneal Pharmaceuticals beats Zai Lab on 8 of the 13 factors compared between the two stocks.
About Amneal Pharmaceuticals
Amneal Pharmaceuticals, Inc., together with its subsidiaries, develops, manufactures, markets, and distributes generics, injectables, biosimilars, and specialty branded pharmaceutical products worldwide. The company operates through three segments: Generics, Specialty, and AvKARE. The Generics segment offers immediate and extended release oral solid, powder, liquid, sterile injectable, nasal spray, inhalation and respiratory, biosimilar, ophthalmic, film, transdermal patch, and topical products. The Specialty segment develops, promotes, sells, and distributes pharmaceutical products with focus on central nervous system disorders, including Parkinson's disease, and endocrine disorders. This segment also provides Rytary, an oral capsule formulation of carbidopa-levodopa to treat Parkinson's disease, post-encephalitic parkinsonism, and parkinsonism; Unithroid for the treatment of hypothyroidism; and IPX203, a pipeline product for Parkinson's disease. The AvKARE segment offers pharmaceuticals, medical and surgical products, and services primarily to governmental agencies, the Department of Defense, and the Department of Veterans Affairs. This segment also distributes bottle and unit dose pharmaceuticals under the AvKARE and AvPAK names; and packages and distributes pharmaceuticals and vitamins to its retail and institutional customers. It sells its products through wholesalers, distributors, hospitals, chain pharmacies, and individual pharmacies. The company was formerly known as Atlas Holdings, Inc. and changed its name to Amneal Pharmaceuticals, Inc. in 2018. Amneal Pharmaceuticals, Inc. was founded in 2002 and is headquartered in Bridgewater, New Jersey.
About Zai Lab
Zai Lab Limited develops and commercializes therapies to treat oncology, autoimmune disorders, infectious diseases, and neuroscience. Its commercial products include Zejula, an orally administered poly polymerase 1/2 inhibitor; Optune, a cancer therapy that uses electric fields tuned to specific frequencies to kill tumor cells; NUZYRA for acute bacterial skin and skin structure infections, and community acquired bacterial pneumonia; Qinlock to treat gastrointestinal stromal tumors, and VYVGART, a human IgG1 antibody fragment for myesthenia gravis. The company also develops Tumor Treating Fields, a portable device for delivery of electric fields; Repotrectinib, a tyrosine kinase inhibitor (TKI) to target ROS1 and TRK A/B/C in TKI-naïve- or -pretreated cancer patients; Tisotumab vedotin, an antibody drug conjugate; Adagrasib for treating KRAS-G12C-mutated NSCLC, colorectal cancer, and pancreatic cancer; and Bemarituzumab to treat gastric and gastroesophageal junction cancer patients. In addition, it develops Sulbactam/durlobactam, a combination of a beta-lactam antibiotic and a beta-lactamase inhibitor for the treatment of serious infections caused by Acinetobacter; KarXT for the treatment of psychiatric and neurological conditions. It has license and collaboration agreement with Tesaro, Inc. to develop, manufacture, and commercialize niraparib; NovoCure to develop and commercialize Tumor Treating Fields; Deciphera to develop and commercialize ripretinib; Paratek Bermuda Ltd. to develop, manufacture, and commercialize omadacycline; argenx, to develop and commercialize efgartigimod; BMS to develop and commercialize tisotumab vedotin and repotrectinib; Mirati to research, develop, manufacture, and commercialize adagrasib; Amgen to develop and commercialize bemarituzumab; and Innoviva to develop and commercialize Sulbactam-Durlobactam; Karuna to develop and commercialize KarXT. The company was incorporated in 2013 and is headquartered in Shanghai, China.
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