Financial Survey: Cognition Therapeutics (NASDAQ:CGTX) versus XOMA Royalty (NASDAQ:XOMA)

Cognition Therapeutics (NASDAQ:CGTX) and XOMA Royalty (NASDAQ:XOMA) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Earnings & Valuation

This table compares Cognition Therapeutics and XOMA Royalty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognition Therapeutics	N/A	N/A	-$33.97 million	($0.67)	-2.58
XOMA Royalty	$28.49 million	14.92	-$13.82 million	($1.55)	-22.69

XOMA Royalty has higher revenue and earnings than Cognition Therapeutics. XOMA Royalty is trading at a lower price-to-earnings ratio than Cognition Therapeutics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cognition Therapeutics and XOMA Royalty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cognition Therapeutics	N/A	-251.23%	-130.75%
XOMA Royalty	-27.57%	2.63%	0.97%

Risk and Volatility

Cognition Therapeutics has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, XOMA Royalty has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Cognition Therapeutics and XOMA Royalty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognition Therapeutics	1	0	3	1	2.80
XOMA Royalty	1	1	2	0	2.25

Cognition Therapeutics presently has a consensus price target of $2.83, suggesting a potential upside of 63.78%. XOMA Royalty has a consensus price target of $69.50, suggesting a potential upside of 97.61%. Given XOMA Royalty’s higher probable upside, analysts clearly believe XOMA Royalty is more favorable than Cognition Therapeutics.

Institutional and Insider Ownership

43.4% of Cognition Therapeutics shares are owned by institutional investors. Comparatively, 95.9% of XOMA Royalty shares are owned by institutional investors. 14.4% of Cognition Therapeutics shares are owned by company insiders. Comparatively, 9.1% of XOMA Royalty shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Cognition Therapeutics beats XOMA Royalty on 8 of the 14 factors compared between the two stocks.

About Cognition Therapeutics

Cognition Therapeutics, Inc., a clinical-stage biopharmaceutical company, engages in the discovery and development of small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system and retina. Its lead product candidate is CT1812, an orally delivered molecule modulator designed to penetrate the blood-brain barrier and bind selectively to the S2R complex, which is in Phase 2 clinical trial for the treatment of Alzheimer's disease, as well as geographic atrophy secondary to dry age-related macular degeneration and synucleinopathies, such as dementia with Lewy bodies. The company was incorporated in 2007 and is headquartered in Purchase, New York.

About XOMA Royalty

XOMA Corporation operates as a biotech royalty aggregator in the United States and the Asia Pacific. It has a portfolio of economic rights to future potential milestone and royalty payments associated with partnered commercial and pre-commercial therapeutic candidates. The company also focuses on early to mid-stage clinical assets primarily in Phase 1 and 2 with commercial sales potential that are licensed to partners; and acquires milestone and royalty revenue streams on late-stage clinical or commercial assets. It has a portfolio with various assets. XOMA Corporation was incorporated in 1981 and is headquartered in Emeryville, California.