The shares of GMS Inc. have decreased by more than -51.65% this year alone. The shares recently went up by 5.63% or $0.97 and now trades at $18.20. The shares of Phio Pharmaceuticals Corp. (NASDAQ:PHIO), has slumped by -93.16% year to date as of 12/06/2018. The shares currently trade at $0.38 and have been able to report a change of 22.62% over the past one week.
The stock of GMS Inc. and Phio Pharmaceuticals Corp. 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. GMS has an EBITDA margin of 9.24%, this implies that the underlying business of GMS is more profitable. These figures suggest that GMS ventures generate a higher ROI than that of PHIO.Cash Flow
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, GMS’s free cash flow per share is a negative -2.02, while that of PHIO is also a negative -41.82.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 GMS is 3.10 and that of PHIO is 1.80. This implies that it is easier for GMS to cover its immediate obligations over the next 12 months than PHIO. The debt ratio of GMS is 2.10 compared to 0.00 for PHIO. GMS can be able to settle its long-term debts and thus is a lower financial risk than PHIO.Valuation
GMS currently trades at a forward P/E of 4.95, a P/B of 1.21, and a P/S of 0.27 while PHIO trades at a P/B of 0.95, and a P/S of 32.81. This means that looking at the earnings, book values and sales basis, GMS 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 GMS is currently at a -41.85% to its one-year price target of 31.30. Looking at its rival pricing, PHIO is at a -81% relative to its price target of 2.00.
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), GMS is given a 1.90 while 2.00 placed for PHIO. This means that analysts are more bullish on the outlook for PHIO stocks.
The stock of Phio Pharmaceuticals Corp. defeats that of GMS Inc. when the two are compared, with PHIO taking 6 out of the total factors that were been considered. PHIO 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, PHIO is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for PHIO is better on when it is viewed on short interest.