Critical Comparison: Recursion Pharmaceuticals (NASDAQ:RXRX) & Catalyst Pharmaceuticals (NASDAQ:CPRX)

Recursion Pharmaceuticals (NASDAQ:RXRX) and Catalyst Pharmaceuticals (NASDAQ:CPRX) are both mid-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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Recursion Pharmaceuticals and Catalyst Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Recursion Pharmaceuticals	1	3	3	0	2.29
Catalyst Pharmaceuticals	0	1	7	2	3.10

Recursion Pharmaceuticals presently has a consensus price target of $9.50, suggesting a potential upside of 123.53%. Catalyst Pharmaceuticals has a consensus price target of $32.67, suggesting a potential upside of 34.15%. Given Recursion Pharmaceuticals’ higher probable upside, equities analysts clearly believe Recursion Pharmaceuticals is more favorable than Catalyst Pharmaceuticals.

Valuation and Earnings

This table compares Recursion Pharmaceuticals and Catalyst Pharmaceuticals”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Recursion Pharmaceuticals	$58.84 million	37.55	-$463.66 million	($1.80)	-2.36
Catalyst Pharmaceuticals	$491.73 million	6.09	$163.89 million	$1.72	14.16

Catalyst Pharmaceuticals has higher revenue and earnings than Recursion Pharmaceuticals. Recursion Pharmaceuticals is trading at a lower price-to-earnings ratio than Catalyst Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Recursion Pharmaceuticals and Catalyst Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Recursion Pharmaceuticals	-1,637.81%	-72.74%	-52.46%
Catalyst Pharmaceuticals	37.63%	39.24%	34.21%

Institutional and Insider Ownership

89.1% of Recursion Pharmaceuticals shares are owned by institutional investors. Comparatively, 79.2% of Catalyst Pharmaceuticals shares are owned by institutional investors. 8.4% of Recursion Pharmaceuticals shares are owned by company insiders. Comparatively, 10.4% of Catalyst Pharmaceuticals 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.

Risk and Volatility

Recursion Pharmaceuticals has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Catalyst Pharmaceuticals has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Summary

Catalyst Pharmaceuticals beats Recursion Pharmaceuticals on 11 of the 15 factors compared between the two stocks.

About Recursion Pharmaceuticals

Recursion Pharmaceuticals, Inc. operates as a clinical-stage biotechnology company, engages in the decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery. The company develops REC-994, which is in Phase 2 clinical trial to treat cerebral cavernous malformation; REC-2282, which is in Phase 2/3 clinical trial for the treatment of neurofibromatosis type 2; REC-4881, which is in Phase 1b/2 clinical trial to treat familial adenomatous polyposis; REC-3964, which is in Phase 1 clinical trial to treat Clostridioides difficile infection; and REC-4881, which is in Phase 2 clinical trial to treat AXIN1 or APC mutant cancers. Its preclinical stage product includes RBM39 to treat HR-proficient ovarian cancer. The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Roche & Genentech; and Takeda Pharmaceutical Company Limited. Recursion Pharmaceuticals, Inc. was incorporated in 2013 and is headquartered in Salt Lake City, Utah.

About Catalyst Pharmaceuticals

Catalyst Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on developing and commercializing therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases in the United States. It offers Firdapse, an amifampridine phosphate tablets for the treatment of patients with lambert-eaton myasthenic syndrome (LEMS); and Ruzurgi for the treatment of pediatric LEMS patients. The company develops Firdapse for the treatment of MuSK antibody positive myasthenia gravis and spinal muscular atrophy type. It has license agreements with BioMarin Pharmaceutical Inc.; and collaboration and license agreement with Endo Ventures Limited for the development and commercialization of generic Sabril tablets. The company was founded in 2002 and is based in Coral Gables, Florida.