Proteon Therapeutics (NASDAQ: PRTO) and Sorrento Therapeutics (NASDAQ:SRNE) are both small-cap healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares Proteon Therapeutics and Sorrento Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Proteon Therapeutics N/A -105.58% -77.60%
Sorrento Therapeutics -15.62% -26.98% -6.39%

Valuation & Earnings

This table compares Proteon Therapeutics and Sorrento Therapeutics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Proteon Therapeutics N/A N/A -$28.52 million ($2.22) -1.01
Sorrento Therapeutics $8.15 million 72.04 -$60.92 million ($0.42) -16.90

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

Institutional & Insider Ownership

50.0% of Proteon Therapeutics shares are held by institutional investors. Comparatively, 12.0% of Sorrento Therapeutics shares are held by institutional investors. 36.3% of Proteon Therapeutics shares are held by insiders. Comparatively, 5.0% of Sorrento Therapeutics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Proteon Therapeutics and Sorrento Therapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Proteon Therapeutics 0 4 1 0 2.20
Sorrento Therapeutics 0 0 5 0 3.00

Proteon Therapeutics presently has a consensus target price of $3.43, indicating a potential upside of 52.59%. Sorrento Therapeutics has a consensus target price of $15.00, indicating a potential upside of 111.27%. Given Sorrento Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Sorrento Therapeutics is more favorable than Proteon Therapeutics.

Risk & Volatility

Proteon Therapeutics has a beta of 1.78, meaning that its stock price is 78% more volatile than the S&P 500. Comparatively, Sorrento Therapeutics has a beta of 1.94, meaning that its stock price is 94% more volatile than the S&P 500.

Summary

Sorrento Therapeutics beats Proteon Therapeutics on 8 of the 13 factors compared between the two stocks.

Proteon Therapeutics Company Profile

Proteon Therapeutics, Inc. is a late-stage biopharmaceutical company, which focuses on the development of pharmaceuticals to address the needs of patients with renal and vascular disease. The Company is involved in research and development activities. The Company’s product candidate, product candidate, vonapanitase, formerly PRT-201, is a recombinant human elastase that it is developing to manage vascular access failure in patients with chronic kidney disease undergoing or planning for hemodialysis, a lifesaving treatment that cannot be conducted without a functioning vascular access. The Company has completed Phase II trial of vonapanitase in patients undergoing creation of an arteriovenous fistula (AVF). The Company initiated the first of two Phase III trials, PATENCY-1, for vonapanitase in radiocephalic AVFs. Its vonapanitase product candidate is a recombinant human elastase under development as a treatment to prevent AVF and arteriovenous graft (AVG) patency loss.

Sorrento Therapeutics Company Profile

Sorrento Therapeutics, Inc. is a biopharmaceutical company. The Company is engaged in the discovery, acquisition, development and commercialization of drug therapeutics. Its primary therapeutic focus is oncology, including the treatment of chronic cancer pain. It is also developing therapeutic products for other indications, including immunology and infectious diseases. Its products in the pipeline include Chimeric Antigen Receptor-T Cell (CAR-T) programs, resiniferatoxin (RTX), and biosimilar/biobetter antibodies clinical development programs. Its pipeline also includes preclinical fully human therapeutic monoclonal antibodies (mAbs), including biosimilars/biobetters, fully human anti-PD-L1 and anti-PD-1 checkpoint inhibitors derived from its G-MAB library platform, antibody drug conjugates (ADCs), bispecific antibodies (BsAbs), as well as CAR-T and Chimeric Antigen Receptor Natural Killer (NK) cells (CAR. NK) for adoptive cellular immunotherapy.

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