Ardelyx (NASDAQ:ARDX – Get Free Report) and Zai Lab (NASDAQ:ZLAB – Get Free Report) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.
Profitability
This table compares Ardelyx and Zai Lab’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ardelyx | -28.82% | -46.60% | -21.49% |
| Zai Lab | -76.14% | -36.97% | -27.10% |
Volatility and Risk
Ardelyx has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Zai Lab has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ardelyx | $124.46 million | 9.99 | -$66.07 million | ($0.30) | -17.50 |
| Zai Lab | $266.72 million | 10.49 | -$334.62 million | ($2.77) | -10.14 |
Ardelyx has higher earnings, but lower revenue than Zai Lab. Ardelyx is trading at a lower price-to-earnings ratio than Zai Lab, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
58.9% of Ardelyx shares are owned by institutional investors. Comparatively, 41.7% of Zai Lab shares are owned by institutional investors. 5.9% of Ardelyx 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 large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of recent ratings and target prices for Ardelyx and Zai Lab, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ardelyx | 0 | 2 | 5 | 1 | 2.88 |
| Zai Lab | 0 | 0 | 4 | 0 | 3.00 |
Ardelyx presently has a consensus target price of $10.42, suggesting a potential upside of 98.41%. Zai Lab has a consensus target price of $52.50, suggesting a potential upside of 86.90%. Given Ardelyx’s higher probable upside, analysts plainly believe Ardelyx is more favorable than Zai Lab.
Summary
Ardelyx beats Zai Lab on 8 of the 15 factors compared between the two stocks.
About Ardelyx
Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.
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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