Analyzing Recursion Pharmaceuticals (NASDAQ:RXRX) and Catalyst Pharmaceuticals (NASDAQ:CPRX)

Catalyst Pharmaceuticals (NASDAQ:CPRX) and Recursion Pharmaceuticals (NASDAQ:RXRX) are both mid-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Profitability

This table compares Catalyst Pharmaceuticals and Recursion Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Catalyst Pharmaceuticals	37.63%	39.24%	34.21%
Recursion Pharmaceuticals	-1,637.81%	-72.74%	-52.46%

Earnings & Valuation

This table compares Catalyst Pharmaceuticals and Recursion Pharmaceuticals”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Catalyst Pharmaceuticals	$491.73 million	5.82	$163.89 million	$1.72	13.54
Recursion Pharmaceuticals	$58.84 million	36.31	-$463.66 million	($1.80)	-2.28

Catalyst Pharmaceuticals has higher revenue and earnings than Recursion Pharmaceuticals. Recursion Pharmaceuticals is trading at a lower price-to-earnings ratio than Catalyst Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Catalyst Pharmaceuticals and Recursion Pharmaceuticals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Catalyst Pharmaceuticals	0	1	7	2	3.10
Recursion Pharmaceuticals	1	3	3	0	2.29

Catalyst Pharmaceuticals presently has a consensus price target of $32.67, suggesting a potential upside of 40.26%. Recursion Pharmaceuticals has a consensus price target of $9.50, suggesting a potential upside of 131.14%. Given Recursion Pharmaceuticals’ higher possible upside, analysts plainly believe Recursion Pharmaceuticals is more favorable than Catalyst Pharmaceuticals.

Institutional and Insider Ownership

79.2% of Catalyst Pharmaceuticals shares are owned by institutional investors. Comparatively, 89.1% of Recursion Pharmaceuticals shares are owned by institutional investors. 10.4% of Catalyst Pharmaceuticals shares are owned by insiders. Comparatively, 8.4% of Recursion Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Catalyst Pharmaceuticals has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Recursion Pharmaceuticals has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.

Summary

Catalyst Pharmaceuticals beats Recursion Pharmaceuticals on 11 of the 15 factors compared between the two stocks.

About Catalyst Pharmaceuticals

Catalyst Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on developing and commercializing therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases in the United States. It offers Firdapse, an amifampridine phosphate tablets for the treatment of patients with lambert-eaton myasthenic syndrome (LEMS); and Ruzurgi for the treatment of pediatric LEMS patients. The company develops Firdapse for the treatment of MuSK antibody positive myasthenia gravis and spinal muscular atrophy type. It has license agreements with BioMarin Pharmaceutical Inc.; and collaboration and license agreement with Endo Ventures Limited for the development and commercialization of generic Sabril tablets. The company was founded in 2002 and is based in Coral Gables, Florida.

About Recursion Pharmaceuticals

Recursion Pharmaceuticals, Inc. operates as a clinical-stage biotechnology company, engages in the decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery. The company develops REC-994, which is in Phase 2 clinical trial to treat cerebral cavernous malformation; REC-2282, which is in Phase 2/3 clinical trial for the treatment of neurofibromatosis type 2; REC-4881, which is in Phase 1b/2 clinical trial to treat familial adenomatous polyposis; REC-3964, which is in Phase 1 clinical trial to treat Clostridioides difficile infection; and REC-4881, which is in Phase 2 clinical trial to treat AXIN1 or APC mutant cancers. Its preclinical stage product includes RBM39 to treat HR-proficient ovarian cancer. The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Roche & Genentech; and Takeda Pharmaceutical Company Limited. Recursion Pharmaceuticals, Inc. was incorporated in 2013 and is headquartered in Salt Lake City, Utah.