Inotek Pharmaceuticals Corp (ITEK) versus Applied Genetic Technologies Corporation (AGTC) Financial Analysis

Inotek Pharmaceuticals Corp (NASDAQ: ITEK) and Applied Genetic Technologies Corporation (NASDAQ:AGTC) are both small-cap healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Profitability

This table compares Inotek Pharmaceuticals Corp and Applied Genetic Technologies Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inotek Pharmaceuticals Corp N/A -43.58% -22.99%
Applied Genetic Technologies Corporation 17.61% 6.62% 4.49%

Risk and Volatility

Inotek Pharmaceuticals Corp has a beta of 2.76, suggesting that its share price is 176% more volatile than the S&P 500. Comparatively, Applied Genetic Technologies Corporation has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.

Institutional and Insider Ownership

29.3% of Inotek Pharmaceuticals Corp shares are held by institutional investors. Comparatively, 54.8% of Applied Genetic Technologies Corporation shares are held by institutional investors. 11.7% of Inotek Pharmaceuticals Corp shares are held by company insiders. Comparatively, 2.5% of Applied Genetic Technologies Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Inotek Pharmaceuticals Corp and Applied Genetic Technologies Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inotek Pharmaceuticals Corp 0 3 1 0 2.25
Applied Genetic Technologies Corporation 0 3 6 0 2.67

Inotek Pharmaceuticals Corp currently has a consensus target price of $4.50, indicating a potential upside of 328.57%. Applied Genetic Technologies Corporation has a consensus target price of $14.63, indicating a potential upside of 195.45%. Given Inotek Pharmaceuticals Corp’s higher probable upside, equities analysts clearly believe Inotek Pharmaceuticals Corp is more favorable than Applied Genetic Technologies Corporation.

Valuation and Earnings

This table compares Inotek Pharmaceuticals Corp and Applied Genetic Technologies Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Inotek Pharmaceuticals Corp N/A N/A -$38.56 million ($1.53) -0.69
Applied Genetic Technologies Corporation $43.24 million 2.07 $8.04 million $0.41 12.07

Applied Genetic Technologies Corporation has higher revenue and earnings than Inotek Pharmaceuticals Corp. Inotek Pharmaceuticals Corp is trading at a lower price-to-earnings ratio than Applied Genetic Technologies Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Applied Genetic Technologies Corporation beats Inotek Pharmaceuticals Corp on 9 of the 12 factors compared between the two stocks.

Inotek Pharmaceuticals Corp Company Profile

Inotek Pharmaceuticals Corporation is a clinical-stage biopharmaceutical company. The Company is focused on the discovery, development and commercialization of therapies for glaucoma and other diseases of the eye. Its lead product candidate, trabodenoson, is a selective adenosine mimetic that the Company has designed to lower intraocular pressure (IOP) by restoring the eye’s natural pressure control mechanism. The Company developed this molecule to selectively stimulate a particular adenosine subreceptor in the eye with the effect of augmenting the intrinsic function of the eye’s trabecular meshwork (TM). Its product pipeline includes trabodenoson monotherapy delivered in an eye drop formulation, as well as a fixed-dose combination (FDC), of trabodenoson with latanoprost given once-daily (QD). The Company is evaluating the potential of trabodenoson to slow the loss of vision associated with glaucoma and degenerative retinal diseases.

Applied Genetic Technologies Corporation Company Profile

Applied Genetic Technologies Corporation is a clinical-stage biotechnology company. The Company develops gene therapy products designed to manage the lives of patients with severe diseases in ophthalmology. As of March 31, 2016, its product candidates included treatments for X-linked retinoschisis (XLRS), over two forms of achromatopsia (ACHM) and X-linked retinitis pigmentosa (XLRP). As of March 31, 2016, the Company was engaged in developing three discovery programs, targeting three indications based on its adeno-associated virus vector technologies. XLRS is an inherited retinal degenerative disease caused by mutations in the retinoschisis1 (RS1) gene. Achromatopsia is an inherited condition that is associated with visual acuity loss, extreme light sensitivity resulting in daytime blindness, and reduced or complete loss of color discrimination, achromatopsia is caused by mutations in any of several genes. The Company is also developing Alpha-1 Antitrypsin Deficiency (Alpha 1).

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