Aerie Pharmaceuticals (NASDAQ:AERI) and TrovaGene (NASDAQ:TROV) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Insider and Institutional Ownership

9.8% of TrovaGene shares are owned by institutional investors. 8.7% of Aerie Pharmaceuticals shares are owned by company insiders. Comparatively, 2.0% of TrovaGene shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Aerie Pharmaceuticals and TrovaGene, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aerie Pharmaceuticals 0 1 12 0 2.92
TrovaGene 0 0 2 0 3.00

Aerie Pharmaceuticals presently has a consensus price target of $40.77, suggesting a potential upside of 97.14%. TrovaGene has a consensus price target of $14.50, suggesting a potential upside of 696.70%. Given TrovaGene’s stronger consensus rating and higher probable upside, analysts plainly believe TrovaGene is more favorable than Aerie Pharmaceuticals.

Profitability

This table compares Aerie Pharmaceuticals and TrovaGene’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aerie Pharmaceuticals -328.34% -77.63% -48.31%
TrovaGene -3,797.67% -185.18% -119.86%

Earnings and Valuation

This table compares Aerie Pharmaceuticals and TrovaGene’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aerie Pharmaceuticals $24.18 million 39.62 -$232.57 million ($4.65) -4.45
TrovaGene $380,000.00 37.08 -$16.46 million ($8.26) -0.22

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

Risk and Volatility

Aerie Pharmaceuticals has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, TrovaGene has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.

Summary

Aerie Pharmaceuticals beats TrovaGene on 9 of the 14 factors compared between the two stocks.

About Aerie Pharmaceuticals

Aerie Pharmaceuticals, Inc., an ophthalmic pharmaceutical company, focuses on the discovery, development, and commercialization of first-in-class therapies for the treatment of glaucoma, retinal diseases, and other eye diseases. Its lead product is Rhopressa, a once-daily eye drop to reduce elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension. The company's advanced-stage product candidate is Roclatan, a once-daily eye drop to reduce IOP to treat patients with open-angle glaucoma and ocular hypertension. Aerie Pharmaceuticals, Inc. has a collaborative research, development, and licensing agreement with DSM. Aerie Pharmaceuticals, Inc. was founded in 2005 and is headquartered in Durham, North Carolina.

About TrovaGene

Trovagene, Inc., a clinical-stage, precision medicine oncology therapeutics company, develops oncology therapeutics for cancer care by leveraging its proprietary Precision Cancer Monitoring (PCM) technology in tumor genomics. Its lead drug candidate, PCM-075, is a Polo-like Kinase 1 selective adenosine triphosphate competitive inhibitor. The PCM-075 is in Phase Ib/II clinical trial in acute myeloid leukemia (AML) and has completed a Phase I clinical trial in advanced solid tumors. The PCM-075 is also in preclinical studies with approximately 10 chemotherapeutic and target agents used in hematologic and solid tumor cancers, including Zytiga (abiraterone acetate); Beleodaq (belinostat); Quizartinib (AC220), a development stage FLT3 inhibitor; and Velcade (bortezomib) in AML, metastatic castration-resistant prostate cancer and other hematologic and solid tumor cancers. Trovagene, Inc. primarily serves pharmaceutical companies and third party laboratories. The company was formerly known as Xenomics, Inc. and changed its name to Trovagene, Inc. in January 2010. Trovagene, Inc. was founded in 1999 and is headquartered in San Diego, California.

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