Agile Therapeutics, Inc. (NASDAQ:AGRX) shares are down more than -75.76% this year and recently increased 10.14% or $0.06 to settle at $0.65. Egalet Corporation (NASDAQ:EGLT), on the other hand, is down -49.45% year to date as of 06/12/2018. It currently trades at $0.51 and has returned 13.57% during the past week.
Agile Therapeutics, Inc. (NASDAQ:AGRX) and Egalet Corporation (NASDAQ:EGLT) are the two most active stocks in the Drugs – Generic industry based on today’s trading volumes. We will compare the two companies based on the strength of various metrics, including growth, profitability, risk, return, and valuation to determine if one is a better investment than the other.Cash Flow
The amount of free cash flow available to investors is ultimately what determines the value of a stock. AGRX’s free cash flow (“FCF”) per share for the trailing twelve months was -0.18. Comparatively, EGLT’s free cash flow per share was -0.44.Liquidity and Financial Risk
Liquidity and leverage ratios are important because they reveal the financial health of a company. AGRX has a current ratio of 2.40 compared to 2.30 for EGLT. This means that AGRX can more easily cover its most immediate liabilities over the next twelve months.Valuation
AGRX trades at a P/B of 0.73, compared to a P/S of 0.95 for EGLT. AGRX is the cheaper of the two stocks on sales basis but is expensive in terms of P/E and P/B 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. AGRX is currently priced at a -88.39% to its one-year price target of 5.60. Comparatively, EGLT is -78.11% relative to its price target of 2.33. This suggests that AGRX is the better investment over the next year.
Risk and Volatility
Beta is a metric that investors frequently use to analyze a stock’s systematic risk. A beta above 1 implies above average market volatility. Conversely, a stock with a beta below 1 is seen as less risky than the overall market. AGRX has a beta of 1.83 and EGLT’s beta is 0.55. EGLT’s shares are therefore the less volatile of the two stocks.Insider Activity and Investor Sentiment
Short interest, or the percentage of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment. AGRX has a short ratio of 0.85 compared to a short interest of 6.06 for EGLT. This implies that the market is currently less bearish on the outlook for AGRX.Summary
Agile Therapeutics, Inc. (NASDAQ:AGRX) beats Egalet Corporation (NASDAQ:EGLT) on a total of 7 of the 13 factors compared between the two stocks. AGRX generates a higher return on investment, has higher cash flow per share and higher liquidity. AGRX is more undervalued relative to its price target. Finally, AGRX has better sentiment signals based on short interest.