Finance

Altimmune, Inc. (ALT) vs. Iovance Biotherapeutics, Inc. (IOVA): Breaking Down the Biotechnology Industry’s Two Hottest Stocks

Altimmune, Inc. (NASDAQ:ALT) shares are down more than -71.08% this year and recently increased 7.87% or $0.05 to settle at $0.58. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), on the other hand, is up 105.63% year to date as of 05/16/2018. It currently trades at $16.45 and has returned 8.94% during the past week.

Altimmune, Inc. (NASDAQ:ALT) and Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) are the two most active stocks in the Biotechnology industry based on today’s trading volumes. The market is clearly enthusiastic about both these stocks, but which is the better investment? To answer this, we will compare the two companies based on the strength of their growth, profitability, risk, returns, valuation, analyst recommendations, and insider trends.

Liquidity and Financial Risk

Liquidity and leverage ratios provide insight into the financial health of a company, and allow investors to determine the likelihood that the company will be able to continue operating as a going concern. ALT has a current ratio of 6.10 compared to 20.60 for IOVA. This means that IOVA can more easily cover its most immediate liabilities over the next twelve months. ALT’s debt-to-equity ratio is 0.00 versus a D/E of 0.00 for IOVA. ALT is therefore the more solvent of the two companies, and has lower financial risk.

Valuation

ALT trades at a P/B of 0.24, and a P/S of 1.36, compared to a P/B of 4.74, for IOVA. ALT is the cheaper of the two stocks on book value basis but is expensive in terms of P/E and P/S ratio. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.

Analyst Price Targets and Opinions

A cheap stock is not necessarily a value stock. Most of the time, a stock is cheap for good reason. A stock only has value if the current price is substantially below the price at which it should trade in the future. ALT is currently priced at a -90.33% to its one-year price target of 6.00. Comparatively, IOVA is -39.39% relative to its price target of 27.14. This suggests that ALT is the better investment over the next year.

Risk and Volatility

Beta is an important measure that gives investors a sense of the market risk associated with a particular stock. A beta above 1 signals above average market risk, while a beta below 1 implies below average volatility. ALT has a beta of 2.46 and IOVA’s beta is 5.44. ALT’s shares are therefore the less volatile of the two stocks.

Insider Activity and Investor Sentiment



Short interest is another tool that analysts use to gauge investor sentiment. It represents the percentage of a stock’s tradable shares that are being shorted. ALT has a short ratio of 1.57 compared to a short interest of 6.29 for IOVA. This implies that the market is currently less bearish on the outlook for ALT.

Summary

Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) beats Altimmune, Inc. (NASDAQ:ALT) on a total of 5 of the 13 factors compared between the two stocks. IOVA , higher liquidity and has lower financial risk. Finally, TYHT has better sentiment signals based on short interest.

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