Financial Comparison: Foundation Medicine (FMI) vs. Its Peers

Foundation Medicine (NASDAQ: FMI) is one of 191 public companies in the “Biotechnology & Medical Research” industry, but how does it weigh in compared to its peers? We will compare Foundation Medicine to related companies based on the strength of its valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Institutional & Insider Ownership

33.0% of Foundation Medicine shares are held by institutional investors. Comparatively, 44.7% of shares of all “Biotechnology & Medical Research” companies are held by institutional investors. 2.7% of Foundation Medicine shares are held by insiders. Comparatively, 14.5% of shares of all “Biotechnology & Medical Research” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Foundation Medicine has a beta of -0.09, suggesting that its share price is 109% less volatile than the S&P 500. Comparatively, Foundation Medicine’s peers have a beta of 1.52, suggesting that their average share price is 52% more volatile than the S&P 500.

Earnings & Valuation

This table compares Foundation Medicine and its peers revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Foundation Medicine $116.86 million -$113.19 million -11.05
Foundation Medicine Competitors $213.37 million -$39.02 million -62.15

Foundation Medicine’s peers have higher revenue and earnings than Foundation Medicine. Foundation Medicine is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Foundation Medicine and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foundation Medicine -119.69% -143.18% -93.58%
Foundation Medicine Competitors -3,316.35% -533.27% -39.75%

Analyst Ratings

This is a summary of current ratings and price targets for Foundation Medicine and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foundation Medicine 0 1 2 0 2.67
Foundation Medicine Competitors 512 2432 6621 122 2.66

Foundation Medicine currently has a consensus price target of $35.00, suggesting a potential downside of 29.15%. As a group, “Biotechnology & Medical Research” companies have a potential upside of 16.20%. Given Foundation Medicine’s peers higher probable upside, analysts plainly believe Foundation Medicine has less favorable growth aspects than its peers.

Summary

Foundation Medicine peers beat Foundation Medicine on 9 of the 12 factors compared.

About Foundation Medicine

Foundation Medicine, Inc. is a molecular information company. The Company sells products that are enabled by its molecular information platform to physicians and biopharmaceutical companies. It is engaged in the business of delivering molecular information about cancer to its customers. Its platform includes various methods and algorithms for analyzing specimens across various types of cancer. Its suite of clinical molecular information products includes FoundationOne, which is used for solid tumors; FoundationOne Heme, which is used for blood-based cancers or hematologic malignancies, including leukemia, lymphoma, myeloma, pediatric cancers and advanced sarcoma; FoundationACT (Assay for Circulating Tumor DNA), which is a blood-based (liquid biopsy) assay that evaluates circulating tumor deoxyribonucleic acid (ctDNA), and FoundationFocus CDxBRCA, which is a companion diagnostic assay to aid in identifying women with ovarian cancer for whom treatment with Rubraca (rucaparib).

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