Critical Review: Aldeyra Therapeutics (NASDAQ:ALDX) & Reata Pharmaceuticals (NASDAQ:RETA)

Aldeyra Therapeutics (NASDAQ:ALDX) and Reata Pharmaceuticals (NASDAQ:RETA) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, risk, profitability, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of current recommendations for Aldeyra Therapeutics and Reata Pharmaceuticals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aldeyra Therapeutics 0 0 2 0 3.00
Reata Pharmaceuticals 0 1 7 0 2.88

Aldeyra Therapeutics currently has a consensus target price of $21.00, indicating a potential upside of 391.80%. Reata Pharmaceuticals has a consensus target price of $257.38, indicating a potential upside of 60.86%. Given Aldeyra Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Aldeyra Therapeutics is more favorable than Reata Pharmaceuticals.

Profitability

This table compares Aldeyra Therapeutics and Reata Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aldeyra Therapeutics N/A -104.92% -75.91%
Reata Pharmaceuticals -1,542.06% -322.36% -65.04%

Valuation and Earnings

This table compares Aldeyra Therapeutics and Reata Pharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aldeyra Therapeutics N/A N/A -$60.83 million ($2.05) -2.08
Reata Pharmaceuticals $26.52 million 200.54 -$290.17 million ($9.54) -16.77

Aldeyra Therapeutics has higher earnings, but lower revenue than Reata Pharmaceuticals. Reata Pharmaceuticals is trading at a lower price-to-earnings ratio than Aldeyra Therapeutics, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

59.4% of Aldeyra Therapeutics shares are owned by institutional investors. Comparatively, 66.4% of Reata Pharmaceuticals shares are owned by institutional investors. 13.5% of Aldeyra Therapeutics shares are owned by insiders. Comparatively, 34.4% of Reata Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Aldeyra Therapeutics has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500. Comparatively, Reata Pharmaceuticals has a beta of 2.14, meaning that its stock price is 114% more volatile than the S&P 500.

Aldeyra Therapeutics Company Profile

Aldeyra Therapeutics, Inc., a biotechnology company, focuses on the development of products for inflammation, inborn errors of metabolism, and other diseases in the United States and internationally. It is developing ADX-102, a small molecule designed to trap and allow for the degradation of aldehydes, as well as ADX-103 and ADX-104 novel candidates for the treatment of noninfectious anterior uveitis, allergic conjunctivitis, dry eye syndrome, sjögren-larsson syndrome, and succinic semi-aldehyde dehydrogenase deficiency. Aldeyra Therapeutics, Inc. has a collaborative research agreement with Janssen Research & Development, LLC for the development of novel immune-modulating drugs for systemic inflammatory diseases. The company was formerly known as Aldexa Therapeutics, Inc. and changed its name to Aldeyra Therapeutics, Inc. in March 2014. Aldeyra Therapeutics, Inc. was founded in 2004 and is headquartered in Lexington, Massachusetts.

Reata Pharmaceuticals Company Profile

Reata Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, develops novel therapeutics for patients with serious or life-threatening diseases by targeting molecular pathways that regulate cellular metabolism and inflammation. The company is developing Phase III clinical trial programs, including bardoxolone methyl (Bard) for the treatment of patients with chronic kidney disease caused by Alport syndrome, as well as for a form of pulmonary arterial hypertension associated with connective tissue disease; and omaveloxolone that is Phase II clinical trial for the treatment of patients with Friedreich's ataxia It is also developing RTA 901, which completed Phase 1 clinical trials for the treatment of orphan neurological indications; and RORgT Inhibitors that are in the preclinical development phase for the potential treatment of a range of autoimmune, inflammatory, and fibrotic diseases. Reata Pharmaceuticals, Inc. has a strategic collaboration agreement with Kyowa Hakko Kirin Co., Ltd. to develop and commercialize Bard for renal, cardiovascular, diabetes, and various other related metabolic indications in Japan, China, Hong Kong, Macao, South Korea, Taiwan, Thailand, Singapore, the Philippines, Malaysia, Indonesia, Brunei, Vietnam, Laos, Myanmar, and Cambodia; and AbbVie Inc. to jointly research, develop, and commercialize all second- and later-generation Nrf2 activators for all indications other than renal, cardiovascular, and metabolic indications. The company was formerly known as Reata Discovery, Inc. and changed its name to Reata Pharmaceuticals, Inc. in May 2005. Reata Pharmaceuticals, Inc. was founded in 2002 and is headquartered in Irving, Texas.

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