The shares of Catabasis Pharmaceuticals, Inc. have decreased by more than -41.04% this year alone. The shares recently went up by 7.13% or $0.06 and now trades at $0.88. The shares of Trevena, Inc. (NASDAQ:TRVN), has slumped by -6.88% year to date as of 07/12/2018. The shares currently trade at $1.49 and have been able to report a change of -0.67% over the past one week.
The stock of Catabasis Pharmaceuticals, Inc. and Trevena, 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. These figures suggest that TRVN ventures generate a higher ROI than that of CATB.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 CATB is 3.40 and that of TRVN is 4.10. This implies that it is easier for CATB to cover its immediate obligations over the next 12 months than TRVN. The debt ratio of CATB is 0.13 compared to 0.69 for TRVN. TRVN can be able to settle its long-term debts and thus is a lower financial risk than CATB.Valuation
CATB currently trades at a P/B of 1.79, and a P/S of 54.57 while TRVN trades at a P/B of 2.66, This means that looking at the earnings, book values and sales basis, CATB 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 CATB is currently at a -82.98% to its one-year price target of 5.17. Looking at its rival pricing, TRVN is at a -81.54% relative to its price target of 8.07.
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), CATB is given a 1.00 while 1.90 placed for TRVN. This means that analysts are more bullish on the outlook for TRVN 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 CATB is 1.60 while that of TRVN is just 7.36. This means that analysts are more bullish on the forecast for CATB stock.
The stock of Catabasis Pharmaceuticals, Inc. defeats that of Trevena, Inc. when the two are compared, with CATB taking 5 out of the total factors that were been considered. CATB 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, CATB is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CATB is better on when it is viewed on short interest.