Head to Head Analysis: Pacira Pharmaceuticals (PCRX) and Aceto (ACET)

Pacira Pharmaceuticals (NASDAQ: PCRX) and Aceto (NASDAQ:ACET) are both small-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Valuation and Earnings

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This table compares Pacira Pharmaceuticals and Aceto’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacira Pharmaceuticals $286.63 million 4.53 -$42.61 million ($1.09) -29.27
Aceto $638.32 million 0.36 $11.37 million $0.23 32.65

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

Risk and Volatility

Pacira Pharmaceuticals has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500. Comparatively, Aceto has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500.

Profitability

This table compares Pacira Pharmaceuticals and Aceto’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacira Pharmaceuticals -14.87% -8.55% -3.77%
Aceto -0.79% 10.26% 4.01%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Pacira Pharmaceuticals and Aceto, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacira Pharmaceuticals 1 10 8 0 2.37
Aceto 0 0 1 0 3.00

Pacira Pharmaceuticals presently has a consensus price target of $45.50, indicating a potential upside of 42.63%. Aceto has a consensus price target of $10.00, indicating a potential upside of 33.16%. Given Pacira Pharmaceuticals’ higher possible upside, equities analysts clearly believe Pacira Pharmaceuticals is more favorable than Aceto.

Insider & Institutional Ownership

76.3% of Aceto shares are owned by institutional investors. 6.6% of Pacira Pharmaceuticals shares are owned by company insiders. Comparatively, 4.1% of Aceto shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Aceto pays an annual dividend of $0.26 per share and has a dividend yield of 3.5%. Pacira Pharmaceuticals does not pay a dividend. Aceto pays out 113.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Aceto beats Pacira Pharmaceuticals on 10 of the 16 factors compared between the two stocks.

Pacira Pharmaceuticals Company Profile

Pacira Pharmaceuticals, Inc. is a holding company. The Company is a pharmaceutical company focused on the development, manufacture and commercialization of pharmaceutical products, based on its DepoFoam extended release drug delivery technology, for use primarily in hospitals and ambulatory surgery centers. Its lead product candidate is EXPAREL (bupivacaine liposome injectable suspension), which consists of bupivacaine, an amide-type local anesthetic, encapsulated in DepoFoam and is indicated for single-dose infiltration into the surgical site to produce postsurgical analgesia. In addition to EXPAREL, DepoFoam is also the basis for its other Food and Drug Administration-approved commercial product, DepoCyt(e), which it manufactures for its commercial partners, as well as its product candidates. The Company’s other product candidates include DepoMeloxicam (DepoMLX) and DepoTranexamic Acid (DepoTXA). DepoCyt(e) is indicated for the intrathecal treatment of lymphomatous meningitis.

Aceto Company Profile

Aceto Corporation (Aceto) is engaged in the marketing, sales and distribution of finished dosage form generic pharmaceuticals, nutraceutical products, pharmaceutical active ingredients and intermediates, specialty performance chemicals inclusive of agricultural intermediates and agricultural protection products. The Company’s business is organized along product lines into three segments: Human Health, Pharmaceutical Ingredients and Performance Chemicals. As of June 30, 2016, it distributed over 1,100 chemical compounds used primarily as finished products or raw materials in the agricultural, coatings and industrial chemical industries. The Human Health segment includes finished dosage form generic drugs and nutraceutical products. As of June 30, 2016, the Pharmaceutical Ingredients segment had two product groups: Active Pharmaceutical Ingredients and Pharmaceutical Intermediates. The Performance Chemicals segment includes specialty chemicals and agricultural protection products.

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