Critical Comparison: Sutro Biopharma (NASDAQ:STRO) & Novavax (NASDAQ:NVAX)

Sutro Biopharma (NASDAQ:STRO) and Novavax (NASDAQ:NVAX) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sutro Biopharma and Novavax, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sutro Biopharma	0	1	7	0	2.88
Novavax	1	2	3	0	2.33

Sutro Biopharma currently has a consensus price target of $11.13, suggesting a potential upside of 432.30%. Novavax has a consensus price target of $17.83, suggesting a potential upside of 98.15%. Given Sutro Biopharma’s stronger consensus rating and higher probable upside, research analysts plainly believe Sutro Biopharma is more favorable than Novavax.

Valuation and Earnings

This table compares Sutro Biopharma and Novavax”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sutro Biopharma	$160.96 million	1.07	-$106.79 million	($1.61)	-1.30
Novavax	$983.71 million	1.47	-$545.06 million	($2.26)	-3.98

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

Volatility & Risk

Sutro Biopharma has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Novavax has a beta of 2.02, meaning that its stock price is 102% more volatile than the S&P 500.

Insider and Institutional Ownership

97.0% of Sutro Biopharma shares are held by institutional investors. Comparatively, 53.0% of Novavax shares are held by institutional investors. 5.9% of Sutro Biopharma shares are held by company insiders. Comparatively, 1.0% of Novavax shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Sutro Biopharma and Novavax’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sutro Biopharma	-77.01%	-101.89%	-28.69%
Novavax	-32.18%	N/A	-17.05%

Summary

Sutro Biopharma beats Novavax on 7 of the 13 factors compared between the two stocks.

About Sutro Biopharma

Sutro Biopharma, Inc. operates as a clinical-stage oncology company. The company develops site-specific and novel-format antibody drug conjugates (ADCs) that enables its proprietary integrated cell-free protein synthesis platform, XpressCF and XpressCF+. Its product candidates include STRO-002, an ADC directed against folate receptor-alpha, which is in Phase II/III clinical trials for patients with ovarian and endometrial cancers; VAX-24 and Vax-31 pneumococcal conjugate vaccine candidates that is in Phase II/III clinical trials for the treatment of invasive pneumococcal disease; and MK-1484, a distinct cytokine derivative molecule that is in Phase I clinical study for the treatment of cancer. The company's pre-clinical product candidates include STRO-003, an ADC directed against an anti-receptor tyrosine kinase-like orphan receptor 1 (ROR1) for the treatment of solid tumors and hematological cancers; and STRO-004, a tissue factor (TF) targeting ADC for the treatment of TF-expressing solid tumors, including cervical, lung, and breast cancer. Sutro Biopharma, Inc. has collaboration and license agreements with Merck Sharp & Dohme Corporation to develop research programs focusing on cytokine derivatives for cancer and autoimmune disorders; Vaxcyte to discover and develop vaccine candidates for the treatment or prophylaxis of infectious diseases; Tasly Biopharmaceuticals Co., Ltd. to develop and commercialize STRO-002 in Greater China; EMD Serono to develop ADCs for multiple cancer targets; and Astellas Pharma Inc. to develop immunostimulatory ADC. The company was formerly known as Fundamental Applied Biology, Inc. Sutro Biopharma, Inc. was incorporated in 2003 and is headquartered in South San Francisco, California.

About Novavax

Novavax, Inc., a biotechnology company, that promotes improved health by discovering, developing, and commercializing vaccines to protect against serious infectious diseases. It offers vaccine platform that combines a recombinant protein approach, nanoparticle technology, and its patented Matrix-M adjuvant to enhance the immune response. It focuses on urgent health challenges, which is evaluating vaccines for COVID-19, influenza, and COVID-19 influenza combination. The company is commercializing a COVID-19 vaccine, NVX-CoV2373 under the brand names of Nuvaxovid, Covovax, and Novavax COVID-19 Vaccine, adjuvanted for adult and adolescent populations as a primary series and for both homologous and heterologous booster indications. It is also developing R21/Matrix-M adjuvant malaria vaccine. Novavax, Inc. was incorporated in 1987 and is headquartered in Gaithersburg, Maryland.