The shares of Verizon Communications Inc. have decreased by more than -1.55% this year alone. The shares recently went up by 0.81% or $0.42 and now trades at $52.11. The shares of Antares Pharma, Inc. (NASDAQ:ATRS), has jumped by 15.08% year to date as of 01/11/2018. The shares currently trade at $2.29 and have been able to report a change of 4.09% over the past one week.
The stock of Verizon Communications Inc. and Antares Pharma, Inc. were two of the most active stocks on Thursday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.
Profitability and Returns
Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. VZ has an EBITDA margin of 36.77%, this implies that the underlying business of VZ is more profitable. The ROI of VZ is 15.10% while that of ATRS is -53.60%. These figures suggest that VZ ventures generate a higher ROI than that of ATRS.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, VZ’s free cash flow per share is a positive 0.55, while that of ATRS is negative -0.01.
Liquidity and Financial Risk
The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for VZ is 1.10 and that of ATRS is 3.30. This implies that it is easier for VZ to cover its immediate obligations over the next 12 months than ATRS. The debt ratio of VZ is 4.38 compared to 0.69 for ATRS. VZ can be able to settle its long-term debts and thus is a lower financial risk than ATRS.
VZ currently trades at a forward P/E of 13.33, a P/B of 7.93, and a P/S of 1.71 while ATRS trades at a forward P/E of 229.00, a P/B of 9.96, and a P/S of 6.49. This means that looking at the earnings, book values and sales basis, VZ is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.
Analyst Price Targets and Opinions
The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of VZ is currently at a 0.73% to its one-year price target of 51.73. Looking at its rival pricing, ATRS is at a -38.61% relative to its price target of 3.73. This figure implies that over the next one year, ATRS is a better investment.
When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), VZ is given a 2.70 while 1.40 placed for ATRS. This means that analysts are more bullish on the outlook for VZ stocks.
Insider Activity and Investor Sentiment
Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for VZ is 2.37 while that of ATRS is just 1.80. This means that analysts are more bullish on the forecast for ATRS stock.
The stock of Antares Pharma, Inc. defeats that of Verizon Communications Inc. when the two are compared, with ATRS taking 6 out of the total factors that were been considered. ATRS happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, ATRS is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for ATRS is better on when it is viewed on short interest.