Critical Review: Enanta Pharmaceuticals (NASDAQ:ENTA) versus Zoetis (NYSE:ZTS)

Zoetis (NYSE:ZTS) and Enanta Pharmaceuticals (NASDAQ:ENTA) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitability, risk and earnings.

Analyst Ratings

This is a summary of recent ratings and target prices for Zoetis and Enanta Pharmaceuticals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zoetis	0	6	6	0	2.50
Enanta Pharmaceuticals	1	0	6	0	2.71

Zoetis presently has a consensus target price of $178.89, suggesting a potential upside of 48.67%. Enanta Pharmaceuticals has a consensus target price of $20.33, suggesting a potential upside of 44.31%. Given Zoetis’ higher possible upside, research analysts clearly believe Zoetis is more favorable than Enanta Pharmaceuticals.

Earnings & Valuation

This table compares Zoetis and Enanta Pharmaceuticals”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zoetis	$9.40 billion	5.64	$2.49 billion	$5.94	20.26
Enanta Pharmaceuticals	$65.32 million	6.23	-$81.89 million	($3.83)	-3.68

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

Profitability

This table compares Zoetis and Enanta Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zoetis	28.21%	57.19%	19.53%
Enanta Pharmaceuticals	-125.36%	-93.76%	-26.13%

Insider and Institutional Ownership

92.8% of Zoetis shares are held by institutional investors. Comparatively, 95.0% of Enanta Pharmaceuticals shares are held by institutional investors. 0.2% of Zoetis shares are held by company insiders. Comparatively, 13.9% of Enanta Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Zoetis has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Enanta Pharmaceuticals has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Summary

Zoetis beats Enanta Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Zoetis

Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of animal health medicines, vaccines, and diagnostic products and services in the United States and internationally. The company commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep and others; and companion animals comprising dogs, cats, and horses. It also offers parasiticides, vaccines, dermatology, other pharmaceutical, anti-infectives, animal health diagnostics, and medicated feed additives. In addition, the company provides animal health diagnostics, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services, and blood glucose monitors; and other non-pharmaceutical products, which include nutritionals, as well as products and services in biodevices, genetic tests, and precision animal health. It markets its products to veterinarians, livestock producers, and pet owners. The company has collaboration Blacksmith Medicines, Inc. to discover and develop novel antibiotics for animal health. Zoetis Inc. was founded in 1952 and is headquartered in Parsippany, New Jersey.

About Enanta Pharmaceuticals

Enanta Pharmaceuticals, Inc., a biotechnology company, discovers and develops small molecule drugs for the treatment of viral infections and liver diseases. Its product pipeline comprises EDP-514, which is in phase 1b clinical development for the treatment of chronic infection with hepatitis B virus or HBV; EDP-938 and EDP-323, which is in phase II clinical development for the treatment of respiratory syncytial virus; EDP-235, which is in phase II clinical development for the treatment of human coronaviruses; and Glecaprevir, which is in the market for the treatment of chronic infection with hepatitis C virus or HCV. The company has a collaborative development and license agreement with Abbott Laboratories to develop, manufacture, and commercialize HCV NS3 and NS3/4A protease inhibitor compounds, including paritaprevir and glecaprevir. Enanta Pharmaceuticals, Inc. was incorporated in 1995 and is headquartered in Watertown, Massachusetts.