Apricus Biosciences, Inc. (NASDAQ:APRI) shares are down more than -85.25% this year and recently decreased -35.38% or -$0.15 to settle at $0.27. BioPharmX Corporation (NYSE:BPMX), on the other hand, is up 98.55% year to date as of 04/16/2018. It currently trades at $0.22 and has returned -1.62% during the past week.
Apricus Biosciences, Inc. (NASDAQ:APRI) and BioPharmX Corporation (NYSE:BPMX) are the two most active stocks in the Drug Manufacturers – Other industry based on today’s trading volumes. To determine if one is a better investment than the other, we will compare the two companies’ growth, profitability, risk, return, and valuation characteristics, as well as their analyst ratings and sentiment signals.Cash Flow
The value of a stock is simply the present value of its future free cash flows. APRI’s free cash flow (“FCF”) per share for the trailing twelve months was -0.16. Comparatively, BPMX’s free cash flow per share was -0.04.Liquidity and Financial Risk
Analysts look at liquidity and leverage ratios to assess how easily a company can cover its liabilities. APRI has a current ratio of 4.20 compared to 0.60 for BPMX. This means that APRI can more easily cover its most immediate liabilities over the next twelve months.Valuation
APRI trades at a P/B of 0.94, compared to a P/S of 415.91 for BPMX. APRI 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
Investors often compare a stock’s current price to an analyst price target to get a sense of the potential upside within the next year. APRI is currently priced at a -78.4% to its one-year price target of 1.25. Comparatively, BPMX is -79.05% relative to its price target of 1.05. This suggests that BPMX is the better investment over the next year.
Risk and Volatility
To gauge the market risk of a particular stock, investors use beta. Stocks with a beta above 1 are more volatile than the market as a whole. Conversely, a beta below 1 implies below average systematic risk. APRI has a beta of 1.34 and BPMX’s beta is -0.60. BPMX’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. APRI has a short ratio of 1.07 compared to a short interest of 0.79 for BPMX. This implies that the market is currently less bearish on the outlook for BPMX.Summary
BioPharmX Corporation (NYSE:BPMX) beats Apricus Biosciences, Inc. (NASDAQ:APRI) on a total of 7 of the 13 factors compared between the two stocks. BPMX generates a higher return on investment and has lower financial risk. BPMX is more undervalued relative to its price target. Finally, BPMX has better sentiment signals based on short interest.