Contrasting Catalyst Pharmaceuticals (NASDAQ:CPRX) & Rhythm Pharmaceuticals (NASDAQ:RYTM)

Catalyst Pharmaceuticals (NASDAQ:CPRX) and Rhythm Pharmaceuticals (NASDAQ:RYTM) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Catalyst Pharmaceuticals N/A -20.97% -17.98%
Rhythm Pharmaceuticals N/A -50.10% -46.67%

Volatility & Risk

Catalyst Pharmaceuticals has a beta of 2.6, suggesting that its share price is 160% more volatile than the S&P 500. Comparatively, Rhythm Pharmaceuticals has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Institutional and Insider Ownership

60.2% of Catalyst Pharmaceuticals shares are owned by institutional investors. Comparatively, 89.1% of Rhythm Pharmaceuticals shares are owned by institutional investors. 10.7% of Catalyst Pharmaceuticals shares are owned by insiders. Comparatively, 4.5% of Rhythm Pharmaceuticals shares are owned by 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.

Analyst Ratings

This is a breakdown of recent recommendations for Catalyst Pharmaceuticals and Rhythm Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Catalyst Pharmaceuticals 0 0 5 0 3.00
Rhythm Pharmaceuticals 0 0 6 0 3.00

Catalyst Pharmaceuticals presently has a consensus target price of $9.10, suggesting a potential upside of 57.99%. Rhythm Pharmaceuticals has a consensus target price of $38.67, suggesting a potential upside of 87.70%. Given Rhythm Pharmaceuticals’ higher probable upside, analysts plainly believe Rhythm Pharmaceuticals is more favorable than Catalyst Pharmaceuticals.

Earnings and Valuation

This table compares Catalyst Pharmaceuticals and Rhythm Pharmaceuticals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Catalyst Pharmaceuticals $500,000.00 1,185.75 -$34.00 million ($0.33) -17.45
Rhythm Pharmaceuticals N/A N/A -$74.06 million ($2.39) -8.62

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

Summary

Catalyst Pharmaceuticals beats Rhythm Pharmaceuticals on 7 of the 10 factors compared between the two stocks.

About Catalyst Pharmaceuticals

Catalyst Pharmaceuticals, Inc., a biopharmaceutical company, focuses on developing and commercializing therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases. It offers Firdapse, a proprietary form of amifampridine phosphate for the treatment of patients with lambert-eaton myasthenic syndrome in the United States. The company also develops Firdapse, which is in various clinical trials for the treatment of patients with congenital myasthenic syndrome, anti-MuSK antibody positive myasthenia gravis, and spinal muscular atrophy type 3. It has license agreements with New York University, the Feinstein Institute for Medical Research, and BioMarin Pharmaceutical Inc.; and collaboration agreement with Endo Ventures Limited for the development and commercialization of generic Sabril tablets. The company was formerly known as Catalyst Pharmaceutical Partners, Inc. and changed its name to Catalyst Pharmaceuticals, Inc. in May 2015. Catalyst Pharmaceuticals, Inc. was founded in 2002 and is based in Coral Gables, Florida.

About Rhythm Pharmaceuticals

Rhythm Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapeutics for the treatment of rare genetic disorders that result in life-threatening metabolic disorders. The company's lead product candidate is setmelanotide, a melanocortin-4 receptor agonist peptide, which is in Phase III clinical trials to treat pro-opiomelanocortin (POMC) and leptin receptor deficiency obesity, and Bardet-Biedl and Alström syndrome; and is in Phase II clinical trials for treating POMC heterozygous deficiency obesity and POMC epigenetic disorders. It is also developing RM-853, an orally available ghrelin o-acyltransferase inhibitor that is in preclinical development for Prader-Willi syndrome. The company was formerly known as Rhythm Metabolic, Inc. and changed its name to Rhythm Pharmaceuticals, Inc. in October 2015. Rhythm Pharmaceuticals, Inc. was founded in 2008 and is headquartered in Boston, Massachusetts.

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