Critical Review: Dr. Reddy’s Laboratories (NYSE:RDY) & BridgeBio Pharma (NASDAQ:BBIO)

Dr. Reddy’s Laboratories (NYSE:RDY) and BridgeBio Pharma (NASDAQ:BBIO) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for Dr. Reddy’s Laboratories and BridgeBio Pharma, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dr. Reddy’s Laboratories	0	2	2	1	2.80
BridgeBio Pharma	0	0	17	0	3.00

Dr. Reddy’s Laboratories currently has a consensus price target of $16.95, indicating a potential upside of 15.07%. BridgeBio Pharma has a consensus price target of $63.94, indicating a potential upside of 24.18%. Given BridgeBio Pharma’s stronger consensus rating and higher possible upside, analysts plainly believe BridgeBio Pharma is more favorable than Dr. Reddy’s Laboratories.

Earnings & Valuation

This table compares Dr. Reddy’s Laboratories and BridgeBio Pharma”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dr. Reddy’s Laboratories	$3.81 billion	3.23	$663.00 million	$0.66	22.32
BridgeBio Pharma	$221.90 million	44.36	-$535.76 million	($4.09)	-12.59

Dr. Reddy’s Laboratories has higher revenue and earnings than BridgeBio Pharma. BridgeBio Pharma is trading at a lower price-to-earnings ratio than Dr. Reddy’s Laboratories, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dr. Reddy’s Laboratories and BridgeBio Pharma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dr. Reddy’s Laboratories	16.99%	17.25%	11.63%
BridgeBio Pharma	-329.25%	N/A	-85.69%

Institutional & Insider Ownership

3.9% of Dr. Reddy’s Laboratories shares are owned by institutional investors. Comparatively, 99.9% of BridgeBio Pharma shares are owned by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are owned by insiders. Comparatively, 18.2% of BridgeBio Pharma shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Dr. Reddy’s Laboratories has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500. Comparatively, BridgeBio Pharma has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Summary

Dr. Reddy’s Laboratories beats BridgeBio Pharma on 8 of the 15 factors compared between the two stocks.

About Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company worldwide. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segments. The company’s Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. The Others segment engages in developing therapies in the fields of oncology and inflammation; research and development of differentiated formulations; and provides digital healthcare and information technology enabled business support services. The company offers its products for various therapeutic categories primarily include gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology. Dr. Reddy’s Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.

About BridgeBio Pharma

BridgeBio Pharma, Inc., a commercial-stage biopharmaceutical company, discovers, creates, tests, and delivers transformative medicines to treat patients who suffer from genetic diseases and cancers. Its products in development programs include AG10, a next-generation oral small molecule near-complete TTR stabilizer that is in Phase 3 clinical trial for the treatment of TTR amyloidosis, or transthyretin amyloid cardiomyopathy (ATTR-CM); low-dose infigratinib, an oral FGFR1-3 selective tyrosine kinase inhibitor, which is in Phase 3 double-blinded, placebo-controlled pivotal study for the treatment option for children with achondroplasia; and BBP-631, an AAV5 gene transfer product candidate that is in Phase 1/2 clinical trial for the treatment of congenital adrenal hyperplasia, or CAH, driven by 21-hydroxylase deficiency, or 21OHD. The company also develops Encaleret, a small molecule antagonist of the calcium sensing receptor, or CaSR, which is in phase 3 clinical trial for treating autosomal dominant hypocalcemia type 1, or ADH1; and BBP-418, a glycosylation substrate pro-drug that is in Phase 3 clinical trial for treating limb-girdle muscular dystrophy type 2I/R9 (LGMD2I/R9). In addition, it engages in developing products for mendelian, oncology, and gene therapy diseases. BridgeBio Pharma, Inc. has license and collaboration agreements with the Leland Stanford Junior University; and Leidos Biomedical Research, Inc. The company was founded in 2015 and is headquartered in Palo Alto, California.