Rallybio (NASDAQ:RLYB – Get Free Report) and Alector (NASDAQ:ALEC – Get Free Report) are both small-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.
Institutional & Insider Ownership
90.3% of Rallybio shares are held by institutional investors. Comparatively, 85.8% of Alector shares are held by institutional investors. 10.3% of Rallybio shares are held by company insiders. Comparatively, 8.3% of Alector shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk and Volatility
Rallybio has a beta of -0.72, suggesting that its share price is 172% less volatile than the S&P 500. Comparatively, Alector has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Rallybio | -911.07% | -40.53% | -38.13% |
| Alector | -850.13% | -531.03% | -44.00% |
Analyst Recommendations
This is a summary of current ratings and price targets for Rallybio and Alector, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rallybio | 0 | 1 | 0 | 0 | 2.00 |
| Alector | 2 | 4 | 3 | 0 | 2.11 |
Alector has a consensus price target of $3.40, indicating a potential upside of 81.82%. Given Alector’s stronger consensus rating and higher probable upside, analysts plainly believe Alector is more favorable than Rallybio.
Valuation and Earnings
This table compares Rallybio and Alector”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rallybio | $860,000.00 | 103.24 | -$8.98 million | ($4.34) | -3.85 |
| Alector | $21.05 million | 9.92 | -$142.93 million | ($1.10) | -1.70 |
Rallybio has higher earnings, but lower revenue than Alector. Rallybio is trading at a lower price-to-earnings ratio than Alector, indicating that it is currently the more affordable of the two stocks.
Summary
Alector beats Rallybio on 7 of the 13 factors compared between the two stocks.
About Rallybio
Rallybio Corporation, a clinical-stage biotechnology company, engages in development and commercialization of life-transforming therapies for patients suffering from severe and rare diseases. Its lead product candidate is RLYB212, a monoclonal anti-HPA-1a antibody that has completed Phase I clinical trial for the prevention of fetal and neonatal alloimmune thrombocytopenia (FNAIT); and RLYB211 for the prevention of FNAIT. The company is also developing RLYB114, a pegylated complement factor 5 (C5)-targeted Affibody molecule in preclinical development for the treatment of complement-mediated ophthalmic diseases; RLYB116, an inhibitor of complement component 5 (C5) to treat several diseases of complement dysregulation which has completed phase 1 trial; and RLYB331, a preclinical antibody, for the treatment of severe anemia with ineffective erythropoiesis and iron overload. It entered into a strategic alliance with AbCellera to discover, develop, and commercialize novel antibody-based therapeutics for rare diseases. Rallybio has collaboration with Exscientia for the development of small molecule therapeutics for rare diseases; and collaboration agreement with Johnson & Johnson to provide pregnant individuals therapeutic solutions at risk of fetal and neonatal alloimmune thrombocytopenia. The company was founded in 2018 and is headquartered in New Haven, Connecticut.
About Alector
Alector, Inc., a clinical stage biopharmaceutical company, develops therapies for the treatment of neurodegeneration diseases. Its products include AL001, an immune activity in the brain with genetic links to multiple neurodegenerative disorders, which is in Phase III clinical trial for the treatment of frontotemporal dementia, Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis diseases; and AL101 that is in Phase I clinical trial for the treatment of neurodegenerative diseases, including Alzheimer's and Parkinson's diseases. The company also offers AL002, a product candidate that is in Phase II clinical trial for the treatment of Alzheimer's disease. Alector, Inc. has a collaboration agreement with Adimab, LLC for the research and development of antibodies; and a strategic collaboration agreement with GlaxoSmithKline plc for the development and commercialization of monoclonal antibodies, such as AL001 and AL101 to treat neurodegenerative diseases. The company was founded in 2013 and is headquartered in South San Francisco, California.
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