Critical Analysis: Innovate Biopharmaceuticals (NASDAQ:INNT) versus Its Rivals

Innovate Biopharmaceuticals (NASDAQ: INNT) is one of 546 public companies in the “Pharmaceutical preparations” industry, but how does it contrast to its competitors? We will compare Innovate Biopharmaceuticals to similar companies based on the strength of its valuation, analyst recommendations, institutional ownership, earnings, risk, dividends and profitability.

Institutional and Insider Ownership

11.9% of Innovate Biopharmaceuticals shares are owned by institutional investors. Comparatively, 46.6% of shares of all “Pharmaceutical preparations” companies are owned by institutional investors. 17.1% of Innovate Biopharmaceuticals shares are owned by insiders. Comparatively, 14.8% of shares of all “Pharmaceutical preparations” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Innovate Biopharmaceuticals and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Innovate Biopharmaceuticals N/A -1,207.69% -245.78%
Innovate Biopharmaceuticals Competitors -1,776.08% -105.48% -28.48%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Innovate Biopharmaceuticals and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innovate Biopharmaceuticals 0 0 2 0 3.00
Innovate Biopharmaceuticals Competitors 4499 12939 27592 991 2.54

Innovate Biopharmaceuticals presently has a consensus price target of $35.00, suggesting a potential upside of 1,781.72%. As a group, “Pharmaceutical preparations” companies have a potential upside of 52.13%. Given Innovate Biopharmaceuticals’ stronger consensus rating and higher probable upside, analysts plainly believe Innovate Biopharmaceuticals is more favorable than its competitors.

Volatility and Risk

Innovate Biopharmaceuticals has a beta of -3.54, suggesting that its stock price is 454% less volatile than the S&P 500. Comparatively, Innovate Biopharmaceuticals’ competitors have a beta of 1.39, suggesting that their average stock price is 39% more volatile than the S&P 500.

Earnings & Valuation

This table compares Innovate Biopharmaceuticals and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Innovate Biopharmaceuticals $4.07 million -$24.16 million -1.90
Innovate Biopharmaceuticals Competitors $2.17 billion $229.91 million -3.77

Innovate Biopharmaceuticals’ competitors have higher revenue and earnings than Innovate Biopharmaceuticals. Innovate Biopharmaceuticals is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

Innovate Biopharmaceuticals competitors beat Innovate Biopharmaceuticals on 7 of the 13 factors compared.

About Innovate Biopharmaceuticals

Innovate Biopharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops medicines for autoimmune and inflammatory diseases. The company's lead product candidate is INN-202 that has completed Phase IIb clinical trial for the treatment of celiac disease. It also develops INN-108, which has completed Phase I clinical trial to treat mild-to-moderate ulcerative colitis; INN-217 for the treatment of non-alcoholic steatohepatitis and microbiome; and INN-289 to treat crohn's disease, as well as product for the treatment of alcoholic steatohepatitis (ASH). In addition, the company holds rights for INN-329, a formulation of secretin that is used to enhance visualization in magnetic resonance cholangiopancreatography procedures that is in Phase III clinical trial. The company has a research collaboration with Massachusetts General Hospital for the treatment of ASH. Innovate Biopharmaceuticals, Inc. is based in Raleigh, North Carolina.

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