Head-To-Head Survey: Zai Lab (NASDAQ:ZLAB) and Ardelyx (NASDAQ:ARDX)

Ardelyx (NASDAQ:ARDX) and Zai Lab (NASDAQ:ZLAB) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Profitability

This table compares Ardelyx and Zai Lab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ardelyx	-28.82%	-46.60%	-21.49%
Zai Lab	-76.14%	-36.97%	-27.10%

Earnings and Valuation

This table compares Ardelyx and Zai Lab”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ardelyx	$124.46 million	9.99	-$66.07 million	($0.30)	-17.50
Zai Lab	$266.72 million	10.49	-$334.62 million	($2.77)	-10.14

Ardelyx has higher earnings, but lower revenue than Zai Lab. Ardelyx is trading at a lower price-to-earnings ratio than Zai Lab, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

58.9% of Ardelyx shares are held by institutional investors. Comparatively, 41.7% of Zai Lab shares are held by institutional investors. 5.9% of Ardelyx shares are held by insiders. Comparatively, 13.9% of Zai Lab shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Ardelyx has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Zai Lab has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Ardelyx and Zai Lab, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ardelyx	0	2	5	1	2.88
Zai Lab	0	0	4	0	3.00

Ardelyx presently has a consensus price target of $10.42, indicating a potential upside of 98.41%. Zai Lab has a consensus price target of $52.50, indicating a potential upside of 86.90%. Given Ardelyx’s higher possible upside, equities research analysts clearly believe Ardelyx is more favorable than Zai Lab.

Summary

Ardelyx beats Zai Lab on 8 of the 15 factors compared between the two stocks.

About Ardelyx

Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.

About Zai Lab

Zai Lab Limited develops and commercializes therapies to treat oncology, autoimmune disorders, infectious diseases, and neuroscience. Its commercial products include Zejula, an orally administered poly polymerase 1/2 inhibitor; Optune, a cancer therapy that uses electric fields tuned to specific frequencies to kill tumor cells; NUZYRA for acute bacterial skin and skin structure infections, and community acquired bacterial pneumonia; Qinlock to treat gastrointestinal stromal tumors, and VYVGART, a human IgG1 antibody fragment for myesthenia gravis. The company also develops Tumor Treating Fields, a portable device for delivery of electric fields; Repotrectinib, a tyrosine kinase inhibitor (TKI) to target ROS1 and TRK A/B/C in TKI-naïve- or -pretreated cancer patients; Tisotumab vedotin, an antibody drug conjugate; Adagrasib for treating KRAS-G12C-mutated NSCLC, colorectal cancer, and pancreatic cancer; and Bemarituzumab to treat gastric and gastroesophageal junction cancer patients. In addition, it develops Sulbactam/durlobactam, a combination of a beta-lactam antibiotic and a beta-lactamase inhibitor for the treatment of serious infections caused by Acinetobacter; KarXT for the treatment of psychiatric and neurological conditions. It has license and collaboration agreement with Tesaro, Inc. to develop, manufacture, and commercialize niraparib; NovoCure to develop and commercialize Tumor Treating Fields; Deciphera to develop and commercialize ripretinib; Paratek Bermuda Ltd. to develop, manufacture, and commercialize omadacycline; argenx, to develop and commercialize efgartigimod; BMS to develop and commercialize tisotumab vedotin and repotrectinib; Mirati to research, develop, manufacture, and commercialize adagrasib; Amgen to develop and commercialize bemarituzumab; and Innoviva to develop and commercialize Sulbactam-Durlobactam; Karuna to develop and commercialize KarXT. The company was incorporated in 2013 and is headquartered in Shanghai, China.