Analyzing Liquidia (NASDAQ:LQDA) and Praxis Precision Medicines (NASDAQ:PRAX)

Liquidia (NASDAQ:LQDA) and Praxis Precision Medicines (NASDAQ:PRAX) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Volatility & Risk

Liquidia has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, Praxis Precision Medicines has a beta of 2.66, indicating that its stock price is 166% more volatile than the S&P 500.

Valuation and Earnings

This table compares Liquidia and Praxis Precision Medicines”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidia	$14.00 million	78.62	-$78.50 million	($1.67)	-7.72
Praxis Precision Medicines	$8.55 million	76.97	-$123.28 million	($10.27)	-3.18

Liquidia has higher revenue and earnings than Praxis Precision Medicines. Liquidia is trading at a lower price-to-earnings ratio than Praxis Precision Medicines, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

64.5% of Liquidia shares are held by institutional investors. Comparatively, 67.8% of Praxis Precision Medicines shares are held by institutional investors. 30.1% of Liquidia shares are held by company insiders. Comparatively, 2.7% of Praxis Precision Medicines shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Liquidia and Praxis Precision Medicines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidia	-765.38%	-163.21%	-67.14%
Praxis Precision Medicines	-9,409.22%	-54.86%	-50.52%

Analyst Ratings

This is a summary of current recommendations and price targets for Liquidia and Praxis Precision Medicines, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidia	0	1	6	2	3.11
Praxis Precision Medicines	1	0	8	0	2.78

Liquidia currently has a consensus target price of $26.63, suggesting a potential upside of 106.40%. Praxis Precision Medicines has a consensus target price of $123.33, suggesting a potential upside of 277.74%. Given Praxis Precision Medicines’ higher possible upside, analysts plainly believe Praxis Precision Medicines is more favorable than Liquidia.

Summary

Liquidia beats Praxis Precision Medicines on 8 of the 15 factors compared between the two stocks.

About Liquidia

Liquidia Corporation, a biopharmaceutical company, develops, manufactures, and commercializes various products for unmet patient needs in the United States. Its lead product candidates include YUTREPIA, an inhaled dry powder formulation of treprostinil for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). The company also offers Remodulin, a treprostinil administered through continuous intravenous and subcutaneous infusion. The company also a license agreement with Pharmosa Biopharm Inc to develop and commercialize L606, an inhaled sustained-release formulation of Treprostinil for the treatment of PAH and PH-ILD. Liquidia Corporation was founded in 2004 and is headquartered in Morrisville, North Carolina.

About Praxis Precision Medicines

Praxis Precision Medicines, Inc., a clinical-stage biopharmaceutical company, engages in the development of therapies for central nervous system disorders characterized by neuronal excitation-inhibition imbalance. It is developing ulixacaltamide, a small molecule inhibitor of T-type calcium channels that is in Phase III clinical trial for the treatment of essential tremor; PRAX-562 for the treatment of pediatric patients with developmental and epileptic encephalopathies (DEE); and PRAX-628 to treat focal epilepsy. The company also develops PRAX-222 for the treatment of pediatric patients with early-onset SCN2A-DEE; PRAX-020 to treat KCNT1 related epilepsies; PRAX-080 for the treatment of PCDH19; and PRAX-090 and PRAX-100 for SYNGAP1 and SCN2A-LoF. It has a license agreement with RogCon Inc.; a research collaboration and license agreement with Ionis Pharmaceuticals, Inc.; a strategic collaboration and license agreement with UCB Biopharma SRL; and collaboration with The Florey Institute to develop three novel ASOs. The company was incorporated in 2015 and is based in Boston, Massachusetts.