Critical Analysis: Beam Therapeutics (NASDAQ:BEAM) and Xenon Pharmaceuticals (NASDAQ:XENE)

Xenon Pharmaceuticals (NASDAQ:XENE – Get Free Report) and Beam Therapeutics (NASDAQ:BEAM – Get Free Report) are both mid-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations and price targets for Xenon Pharmaceuticals and Beam Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xenon Pharmaceuticals 1 1 12 1 2.87
Beam Therapeutics 1 2 8 1 2.75

Xenon Pharmaceuticals currently has a consensus price target of $70.14, suggesting a potential upside of 92.17%. Beam Therapeutics has a consensus price target of $50.10, suggesting a potential upside of 103.99%. Given Beam Therapeutics’ higher possible upside, analysts plainly believe Beam Therapeutics is more favorable than Xenon Pharmaceuticals.

Valuation and Earnings

This table compares Xenon Pharmaceuticals and Beam Therapeutics”s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Xenon Pharmaceuticals $7.50 million 470.46 -$345.91 million ($4.74) -7.70
Beam Therapeutics $139.74 million 18.15 -$79.99 million ($0.86) -28.56

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

Risk & Volatility

Xenon Pharmaceuticals has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Beam Therapeutics has a beta of 2.2, indicating that its stock price is 120% more volatile than the S&P 500.

Insider & Institutional Ownership

95.5% of Xenon Pharmaceuticals shares are held by institutional investors. Comparatively, 99.7% of Beam Therapeutics shares are held by institutional investors. 2.9% of Xenon Pharmaceuticals shares are held by insiders. Comparatively, 3.8% of Beam Therapeutics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Xenon Pharmaceuticals and Beam Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xenon Pharmaceuticals N/A -43.98% -41.72%
Beam Therapeutics -54.75% -30.71% -24.07%

Summary

Beam Therapeutics beats Xenon Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Xenon Pharmaceuticals

(Get Free Report)

Xenon Pharmaceuticals Inc., a neuroscience-focused biopharmaceutical company, engages in the development of therapeutics to treat patients with neurological disorders in Canada. Its clinical development pipeline includes XEN1101, a novel and potent Kv7 potassium channel opener, which is in Phase 3 clinical trials for the treatment of epilepsy and other neurological disorders. The company has a license and collaboration agreement with the Neurocrine Biosciences, Inc. for the development of NBI-921352, a selective Nav1.6 sodium channel inhibitor that is in Phase 2 clinical trials for the treatment of SCN8A developmental and epileptic encephalopathy, and other indications, including adult focal epilepsy. Xenon Pharmaceuticals Inc. was incorporated in 1996 and is headquartered in Burnaby, Canada.

About Beam Therapeutics

(Get Free Report)

Beam Therapeutics Inc., a biotechnology company, engages in the development of precision genetic medicines for patients suffering from serious diseases in the United States. It develops BEAM-101 for the treatment of sickle cell disease or beta-thalassemia; and BEAM-302, a liver-targeting LNP formulation to treat severe alpha-1 antitrypsin deficiency; BEAM-201, an anti-CD7 CAR-T product candidate, which is in Phase 1/2 clinical trials for the treatment of refractory T-cell acute lymphoblastic leukemia/T cell lymphoblastic lymphoma; and BEAM-301, a liver-targeting LNP formulation for the treatment of glycogen storage disease 1a. The company has research collaboration agreement with Pfizer Inc., focus on in vivo base editing programs for targets rare genetic diseases of the liver, muscle, and central nervous system; Apellis Pharmaceuticals to conduct preclinical research on target specific genes within the complement system in various organs, including the eye, liver, and brain; Verve Therapeutics, Inc., for cardiovascular disease treatments; Sana Biotechnology, Inc., to research, develop, and commercialize rights to CRISPR Cas12b for cell therapy programs; and Orbital Therapeutics design RNA for the prevention, treatment or diagnosis of human disease. Beam Therapeutics Inc. was incorporated in 2017 and is based in Cambridge, Massachusetts.

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