Critical Survey: Lexicon Pharmaceuticals (NASDAQ:LXRX) & ARAVIVE (NASDAQ:ARAV)

Lexicon Pharmaceuticals (NASDAQ:LXRX) and ARAVIVE (NASDAQ:ARAV) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Lexicon Pharmaceuticals and ARAVIVE”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lexicon Pharmaceuticals	$31.08 million	15.67	-$200.40 million	($0.33)	-4.06
ARAVIVE	$9.14 million	N/A	-$76.32 million	N/A	N/A

ARAVIVE has lower revenue, but higher earnings than Lexicon Pharmaceuticals.

Profitability

This table compares Lexicon Pharmaceuticals and ARAVIVE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lexicon Pharmaceuticals	-206.43%	-83.63%	-42.22%
ARAVIVE	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Lexicon Pharmaceuticals and ARAVIVE, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lexicon Pharmaceuticals	0	3	3	0	2.50
ARAVIVE	0	0	0	0	0.00

Lexicon Pharmaceuticals currently has a consensus target price of $3.23, suggesting a potential upside of 140.67%. Given Lexicon Pharmaceuticals’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Lexicon Pharmaceuticals is more favorable than ARAVIVE.

Insider and Institutional Ownership

74.7% of Lexicon Pharmaceuticals shares are owned by institutional investors. Comparatively, 35.8% of ARAVIVE shares are owned by institutional investors. 13.9% of Lexicon Pharmaceuticals shares are owned by company insiders. Comparatively, 60.4% of ARAVIVE shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

About Lexicon Pharmaceuticals

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of pharmaceutical products. Its orally-delivered small molecule drug candidates under development comprise Sotagliflozin that completed Phase III clinical trials for the for the treatment of heart failure and type 1 diabetes; and LX9211, which is in Phase II clinical development for the treatment of neuropathic pain and LX2761, which is in Phase I clinical development for gastrointestinal tract. Lexicon Pharmaceuticals, Inc. has strategic collaboration and license agreements with Bristol-Myers Squibb Company and Genentech, Inc. The company was incorporated in 1995 and is headquartered in The Woodlands, Texas.

About ARAVIVE

Aravive, Inc., a clinical-stage biopharmaceutical company, develops transformative treatments for life-threatening diseases, including cancer and fibrosis in the United States. Its lead product candidate is batiraxcept, an ultrahigh-affinity, decoy protein that targets the GAS6-AXL signaling pathway, which is in Phase III clinical trial for the treatment of platinum- resistant recurrent ovarian cancer; and in Phase Ib/II clinical trial for the treatment of clear cell renal cell carcinoma and pancreatic adenocarcinoma. The company also develops AVB-S6, a soluble Fc-fusion protein to block the activation of the GAS6-AXL signaling pathway. It has a license and collaboration agreement with WuXi Biologics (Hong Kong) Limited to identify and develop novel high-affinity bispecific antibodies targeting cancer and fibrosis; and license agreement with 3D Medicines Inc. to develop products that contain batiraxcept as the sole drug substance for the treatment of human oncological diseases in mainland China, Taiwan, Hong Kong, and Macau. The company was formerly known as Versartis, Inc. and changed its name to Aravive, Inc. in October 2018. Aravive, Inc. was incorporated in 2008 and is headquartered in Houston, Texas.