Arcadia Biosciences (NASDAQ:RKDA – Get Free Report) and Alector (NASDAQ:ALEC – Get Free Report) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.
Risk and Volatility
Arcadia Biosciences has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Alector has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.
Earnings & Valuation
This table compares Arcadia Biosciences and Alector”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Arcadia Biosciences | $5.05 million | 1.11 | -$7.04 million | $1.05 | 3.90 |
| Alector | $100.56 million | 1.51 | -$119.05 million | ($1.16) | -1.29 |
Arcadia Biosciences has higher earnings, but lower revenue than Alector. Alector is trading at a lower price-to-earnings ratio than Arcadia Biosciences, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
17.7% of Arcadia Biosciences shares are owned by institutional investors. Comparatively, 85.8% of Alector shares are owned by institutional investors. 1.8% of Arcadia Biosciences shares are owned by company insiders. Comparatively, 9.7% of Alector shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Arcadia Biosciences and Alector, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Arcadia Biosciences | 1 | 0 | 0 | 0 | 1.00 |
| Alector | 3 | 7 | 1 | 0 | 1.82 |
Alector has a consensus target price of $3.00, indicating a potential upside of 100.00%. Given Alector’s stronger consensus rating and higher possible upside, analysts plainly believe Alector is more favorable than Arcadia Biosciences.
Profitability
This table compares Arcadia Biosciences and Alector’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Arcadia Biosciences | -139.36% | -34.75% | -20.91% |
| Alector | -142.10% | -112.06% | -26.37% |
Summary
Alector beats Arcadia Biosciences on 8 of the 14 factors compared between the two stocks.
About Arcadia Biosciences
Arcadia Biosciences, Inc. produces and markets plant-based food and beverage products in the United States. The company develops crop improvements primarily in wheat to enhance farm economics by improving the performance of crops in the field, as well as their value as food ingredients. Its food, beverage, and body case products include GoodWheat, Zola coconut water, ProVault topical pain relief, and SoulSpring. The company was incorporated in 2002 and is headquartered in Dallas, Texas.
About Alector
Alector, Inc., a clinical stage biopharmaceutical company, develops therapies for the treatment of neurodegeneration diseases. Its products include AL001, an immune activity in the brain with genetic links to multiple neurodegenerative disorders, which is in Phase III clinical trial for the treatment of frontotemporal dementia, Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis diseases; and AL101 that is in Phase I clinical trial for the treatment of neurodegenerative diseases, including Alzheimer's and Parkinson's diseases. The company also offers AL002, a product candidate that is in Phase II clinical trial for the treatment of Alzheimer's disease. Alector, Inc. has a collaboration agreement with Adimab, LLC for the research and development of antibodies; and a strategic collaboration agreement with GlaxoSmithKline plc for the development and commercialization of monoclonal antibodies, such as AL001 and AL101 to treat neurodegenerative diseases. The company was founded in 2013 and is headquartered in South San Francisco, California.
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