Comparing ALX Oncology (NASDAQ:ALXO) & Harmony Biosciences (NASDAQ:HRMY)

Harmony Biosciences (NASDAQ:HRMY) and ALX Oncology (NASDAQ:ALXO) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Institutional and Insider Ownership

86.2% of Harmony Biosciences shares are held by institutional investors. Comparatively, 98.0% of ALX Oncology shares are held by institutional investors. 23.6% of Harmony Biosciences shares are held by company insiders. Comparatively, 21.0% of ALX Oncology shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Harmony Biosciences and ALX Oncology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harmony Biosciences	0	2	7	1	2.90
ALX Oncology	1	1	5	0	2.57

Harmony Biosciences currently has a consensus target price of $45.63, indicating a potential upside of 26.70%. ALX Oncology has a consensus target price of $3.50, indicating a potential upside of 191.67%. Given ALX Oncology’s higher possible upside, analysts plainly believe ALX Oncology is more favorable than Harmony Biosciences.

Valuation and Earnings

This table compares Harmony Biosciences and ALX Oncology”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harmony Biosciences	$714.73 million	2.90	$145.49 million	$3.18	11.32
ALX Oncology	N/A	N/A	-$134.85 million	($2.03)	-0.59

Harmony Biosciences has higher revenue and earnings than ALX Oncology. ALX Oncology is trading at a lower price-to-earnings ratio than Harmony Biosciences, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Harmony Biosciences has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, ALX Oncology has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Profitability

This table compares Harmony Biosciences and ALX Oncology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harmony Biosciences	22.50%	24.88%	17.01%
ALX Oncology	N/A	-138.86%	-96.71%

Summary

Harmony Biosciences beats ALX Oncology on 12 of the 14 factors compared between the two stocks.

About Harmony Biosciences

Harmony Biosciences Holdings, Inc., a commercial-stage pharmaceutical company, focuses on developing and commercializing therapies for patients with rare and other neurological diseases in the United States. The company offers WAKIX (pitolisant), a molecule with a novel mechanism of action for the treatment of excessive daytime sleepiness in adult patients with narcolepsy. It also offers HBS-102, a melanin-concentrating hormone receptor 1 for MCH neurons. The company was formerly known as Harmony Biosciences II, Inc. and changed its name to Harmony Biosciences Holdings, Inc. in February 2020. Harmony Biosciences Holdings, Inc. was incorporated in 2017 and is headquartered in Plymouth Meeting, Pennsylvania.

About ALX Oncology

ALX Oncology Holdings Inc., a clinical-stage immuno-oncology company, focuses on developing therapies for cancer patients in the United States. The company's lead product candidate is Evorpacept, a CD47 blocking therapeutic biologic in development as a combination therapy with other anti-cancer agents, including ASPEN-06, under Phase 2 clinical study for treating Gastric/GEJ cancer; ASPEN-07, under Phase 1 clinical study for treating urothelial cancer; and ASPEN-03 and ASPEN-04, both under Phase 2 clinical study for treating head and neck squamous cell carcinoma. It also has collaboration agreement for Evorpacept combination programs comprising Jazz Pharmaceuticals plc for zanidatamab, under Phase 1 trial for the treatment of breast cancer and other solid tumors; Quantum Leap Healthcare collaborative with an ADC, fam-trastuzumab deruxtecan-nxki, under Phase 1 trial for the treatment of patients with breast cancer; MD Anderson Cancer Center with rituximab and lenalidomide for the treatment of patients with indolent and aggressive NHL; Sanofi with isatuximab and dexamethasone, under Phase 1/2 trial for the treatment of patients with relapsed or refractory multiple myeloma; Academic Gastrointestinal Cancer Consortium with pembrolizumab and cetuximab, under Phase 2 trial to treat refractory microsatellite stable metastatic colorectal cancer; and University of Pittsburgh with liposomal doxorubicin and pembrolizumab, under Phase 2 trial recurrent platinum-resistant ovarian cancer. In addition, the company has collaboration agreement with Tallac Therapeutics, Inc. for the development of ALTA-002, a potent immune activator targeted to myeloid cells in the tumor to promote innate and adaptive anti-cancer immune responses. It also has license agreements with Board of Trustees of the Leland Stanford Junior University, Selexis SA, and Crystal Bioscience, Inc. The company was incorporated in 2015 and is headquartered in South San Francisco, California.