Financial Review: Rigel Pharmaceuticals (NASDAQ:RIGL) versus Revolution Medicines (NASDAQ:RVMD)

Rigel Pharmaceuticals (NASDAQ:RIGL) and Revolution Medicines (NASDAQ:RVMD) are both healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Insider and Institutional Ownership

66.2% of Rigel Pharmaceuticals shares are owned by institutional investors. Comparatively, 94.3% of Revolution Medicines shares are owned by institutional investors. 10.5% of Rigel Pharmaceuticals shares are owned by insiders. Comparatively, 7.6% of Revolution Medicines shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Rigel Pharmaceuticals and Revolution Medicines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rigel Pharmaceuticals	116.30%	22.95%	17.19%
Revolution Medicines	N/A	-89.91%	-57.76%

Risk & Volatility

Rigel Pharmaceuticals has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Revolution Medicines has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Rigel Pharmaceuticals and Revolution Medicines, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rigel Pharmaceuticals	1	2	3	0	2.33
Revolution Medicines	1	1	21	1	2.92

Rigel Pharmaceuticals presently has a consensus target price of $66.75, suggesting a potential upside of 58.74%. Revolution Medicines has a consensus target price of $263.15, suggesting a potential upside of 31.48%. Given Rigel Pharmaceuticals’ higher probable upside, equities research analysts clearly believe Rigel Pharmaceuticals is more favorable than Revolution Medicines.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rigel Pharmaceuticals	$294.28 million	2.64	$367.02 million	$15.51	2.71
Revolution Medicines	$11.58 million	3,704.68	-$1.13 billion	($9.11)	-21.97

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

Summary

Rigel Pharmaceuticals beats Revolution Medicines on 9 of the 15 factors compared between the two stocks.

About Rigel Pharmaceuticals

Rigel Pharmaceuticals, Inc., a biotechnology company, engages in discovering, developing, and providing therapies that enhance the lives of patients with hematologic disorders and cancer. The company’s commercialized products include Tavalisse, an oral spleen tyrosine kinase inhibitor for the treatment of adult patients with chronic immune thrombocytopenia; Rezlidhia, a non-intensive monotherapy for the treatment of adult patients with relapsed or refractory (R/R) acute myeloid leukemia (AML) with a susceptible isocitrate dehydrogenase-1 (IDH1) mutation as detected by an FDA-approved test; and GAVRETO, a once daily, small molecule, oral, kinase inhibitor for the treatment of adult patients with metastatic rearranged during transfection (RET) fusion-positive non-small cell lung cancer, as well as for the treatment of adult and pediatric patients 12 years of age and older with advanced or metastatic RET fusion-positive thyroid cancer. It also develops R289, an oral IRAK1/4 Inhibitor, which is in Phase 1b clinical trials for the treatment of hematology-oncology, autoimmune, and inflammatory diseases; and a receptor-interacting serine/threonine-protein kinase 1 (RIPK1) inhibitor program in clinical development with partner Eli Lilly and Company. In addition, the company has product candidates in clinical development with partners BerGenBio ASA and Daiichi Sankyo. The company has strategic development collaboration with The University of Texas MD Anderson Cancer Center for the development of REZLIDHIA (Olutasidenib) in acute myeloid leukemia (AML) and other hematologic cancers. The company was incorporated in 1996 and is headquartered in South San Francisco, California.

About Revolution Medicines

Revolution Medicines, Inc., a clinical-stage precision oncology company, develops novel targeted therapies for RAS-addicted cancers. The company’s research and development pipeline comprises RAS(ON) inhibitors designed to be used as monotherapy in combination with other RAS(ON) inhibitors and/or in combination with RAS companion inhibitors or other therapeutic agents, and RAS companion inhibitors for combination treatment strategies. Its RAS(ON) inhibitors include RMC-6236 (multi), RMC-6291 (G12C), and RMC-9805 (G12D), which are in phase 1 clinical trial; and development candidates comprise RMC-5127 (G12V), RMC-0708 (Q61H), and RMC-8839 (G13C), as well as programs focused on G12R and other targets. The company’s RAS companion inhibitors include RMC-4630 that is in phase 2 clinical trial; and RMC-5552, which is in phase 1 clinical trial. Revolution Medicines, Inc. was incorporated in 2014 and is headquartered in Redwood City, California.