The shares of Portola Pharmaceuticals, Inc. have increased by more than 30.28% this year alone. The shares recently went up by 2.54% or $0.63 and now trades at $25.43. The shares of Calithera Biosciences, Inc. (NASDAQ:CALA), has slumped by -11.22% year to date as of 08/05/2019. The shares currently trade at $3.56 and have been able to report a change of -14.63% over the past one week.
The stock of Portola Pharmaceuticals, Inc. and Calithera Biosciences, Inc. were two of the most active stocks on Monday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.
Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. These figures suggest that PTLA ventures generate a higher ROI than that of CALA.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, PTLA’s free cash flow per share is a negative -0.16, while that of CALA is also a negative -0.09.Liquidity and Financial Risk
The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for PTLA is 4.80 and that of CALA is 6.80. This implies that it is easier for PTLA to cover its immediate obligations over the next 12 months than CALA. The debt ratio of PTLA is 5.70 compared to 0.00 for CALA. PTLA can be able to settle its long-term debts and thus is a lower financial risk than CALA.
PTLA currently trades at a P/B of 35.32, and a P/S of 31.97 while CALA trades at a P/B of 1.30, and a P/S of 10.84. This means that looking at the earnings, book values and sales basis, PTLA is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.Analyst Price Targets and Opinions
The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of PTLA is currently at a -38.57% to its one-year price target of 41.40. Looking at its rival pricing, CALA is at a -73.29% relative to its price target of 13.33.
When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), PTLA is given a 1.80 while 1.00 placed for CALA. This means that analysts are more bullish on the outlook for PTLA stocks.Insider Activity and Investor Sentiment
Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for PTLA is 14.83 while that of CALA is just 2.71. This means that analysts are more bullish on the forecast for CALA stock.
The stock of Portola Pharmaceuticals, Inc. defeats that of Calithera Biosciences, Inc. when the two are compared, with PTLA taking 1 out of the total factors that were been considered. PTLA happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, PTLA is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for PTLA is better on when it is viewed on short interest.