Ascendis Pharma A/S (NASDAQ:ASND) & XOMA Royalty (NASDAQ:XOMA) Critical Contrast

Ascendis Pharma A/S (NASDAQ:ASND) and XOMA Royalty (NASDAQ:XOMA) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Valuation and Earnings

This table compares Ascendis Pharma A/S and XOMA Royalty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ascendis Pharma A/S	$393.54 million	34.12	-$409.12 million	($4.44)	-48.80
XOMA Royalty	$28.49 million	11.85	-$13.82 million	$0.74	36.85

XOMA Royalty has lower revenue, but higher earnings than Ascendis Pharma A/S. Ascendis Pharma A/S is trading at a lower price-to-earnings ratio than XOMA Royalty, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Ascendis Pharma A/S and XOMA Royalty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ascendis Pharma A/S	1	0	14	2	3.00
XOMA Royalty	1	1	3	0	2.40

Ascendis Pharma A/S currently has a consensus target price of $264.44, indicating a potential upside of 22.05%. XOMA Royalty has a consensus target price of $60.60, indicating a potential upside of 122.22%. Given XOMA Royalty’s higher probable upside, analysts plainly believe XOMA Royalty is more favorable than Ascendis Pharma A/S.

Volatility and Risk

Ascendis Pharma A/S has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, XOMA Royalty has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Profitability

This table compares Ascendis Pharma A/S and XOMA Royalty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ascendis Pharma A/S	-35.51%	N/A	-20.56%
XOMA Royalty	32.28%	2.91%	1.03%

Insider and Institutional Ownership

95.9% of XOMA Royalty shares are owned by institutional investors. 40.0% of Ascendis Pharma A/S shares are owned by insiders. Comparatively, 9.1% of XOMA Royalty shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

XOMA Royalty beats Ascendis Pharma A/S on 9 of the 15 factors compared between the two stocks.

About Ascendis Pharma A/S

Ascendis Pharma A/S, a biopharmaceutical company, focuses on developing therapies for unmet medical needs. It offers SKYTROFA for treating patients with growth hormone deficiency (GHD). The company is also developing a pipeline of three independent endocrinology rare disease product candidates in clinical development, as well as focuses on advancing oncology therapeutic candidates. The company was incorporated in 2006 and is headquartered in Hellerup, Denmark.

About XOMA Royalty

XOMA Corporation operates as a biotech royalty aggregator in the United States and the Asia Pacific. It has a portfolio of economic rights to future potential milestone and royalty payments associated with partnered commercial and pre-commercial therapeutic candidates. The company also focuses on early to mid-stage clinical assets primarily in Phase 1 and 2 with commercial sales potential that are licensed to partners; and acquires milestone and royalty revenue streams on late-stage clinical or commercial assets. It has a portfolio with various assets. XOMA Corporation was incorporated in 1981 and is headquartered in Emeryville, California.