Zai Lab (NASDAQ:ZLAB – Get Free Report) and Cytokinetics (NASDAQ:CYTK – Get Free Report) are both mid-cap healthcare companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.
Risk & Volatility
Zai Lab has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Cytokinetics has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.
Institutional & Insider Ownership
41.6% of Zai Lab shares are held by institutional investors. 4.9% of Zai Lab shares are held by insiders. Comparatively, 2.6% of Cytokinetics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zai Lab | $460.16 million | 6.18 | -$175.54 million | ($1.71) | -14.61 |
| Cytokinetics | $88.04 million | 88.91 | -$784.96 million | ($7.22) | -8.71 |
Zai Lab has higher revenue and earnings than Cytokinetics. Zai Lab is trading at a lower price-to-earnings ratio than Cytokinetics, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Zai Lab and Cytokinetics, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zai Lab | 1 | 1 | 4 | 1 | 2.71 |
| Cytokinetics | 1 | 1 | 18 | 0 | 2.85 |
Zai Lab presently has a consensus target price of $37.25, suggesting a potential upside of 49.06%. Cytokinetics has a consensus target price of $106.06, suggesting a potential upside of 68.58%. Given Cytokinetics’ stronger consensus rating and higher possible upside, analysts plainly believe Cytokinetics is more favorable than Zai Lab.
Profitability
This table compares Zai Lab and Cytokinetics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Zai Lab | -41.86% | -27.43% | -16.72% |
| Cytokinetics | -1,321.12% | N/A | -51.01% |
Summary
Zai Lab beats Cytokinetics on 9 of the 15 factors compared between the two stocks.
About Zai Lab
Zai Lab Limited develops and commercializes therapies to treat oncology, autoimmune disorders, infectious diseases, and neuroscience. Its commercial products include Zejula, an orally administered poly polymerase 1/2 inhibitor; Optune, a cancer therapy that uses electric fields tuned to specific frequencies to kill tumor cells; NUZYRA for acute bacterial skin and skin structure infections, and community acquired bacterial pneumonia; Qinlock to treat gastrointestinal stromal tumors, and VYVGART, a human IgG1 antibody fragment for myesthenia gravis. The company also develops Tumor Treating Fields, a portable device for delivery of electric fields; Repotrectinib, a tyrosine kinase inhibitor (TKI) to target ROS1 and TRK A/B/C in TKI-naïve- or -pretreated cancer patients; Tisotumab vedotin, an antibody drug conjugate; Adagrasib for treating KRAS-G12C-mutated NSCLC, colorectal cancer, and pancreatic cancer; and Bemarituzumab to treat gastric and gastroesophageal junction cancer patients. In addition, it develops Sulbactam/durlobactam, a combination of a beta-lactam antibiotic and a beta-lactamase inhibitor for the treatment of serious infections caused by Acinetobacter; KarXT for the treatment of psychiatric and neurological conditions. It has license and collaboration agreement with Tesaro, Inc. to develop, manufacture, and commercialize niraparib; NovoCure to develop and commercialize Tumor Treating Fields; Deciphera to develop and commercialize ripretinib; Paratek Bermuda Ltd. to develop, manufacture, and commercialize omadacycline; argenx, to develop and commercialize efgartigimod; BMS to develop and commercialize tisotumab vedotin and repotrectinib; Mirati to research, develop, manufacture, and commercialize adagrasib; Amgen to develop and commercialize bemarituzumab; and Innoviva to develop and commercialize Sulbactam-Durlobactam; Karuna to develop and commercialize KarXT. The company was incorporated in 2013 and is headquartered in Shanghai, China.
About Cytokinetics
Cytokinetics, Incorporated, a late-stage biopharmaceutical company, focuses on discovering, developing, and commercializing muscle activators and inhibitors as potential treatments for debilitating diseases. The company develops small molecule drug candidates primarily engineered to impact muscle function and contractility. Its drug candidates include omecamtiv mecarbil, a novel cardiac myosin activator that is in Phase III clinical trial in patients with heart failure. The company also develops CK-136, a novel cardiac troponin activator that is in Phase I clinical trial; CK-586, a small molecule cardiac myosin inhibitor, that is in Phase I clinical trial; and aficamten, a novel cardiac myosin inhibitor, which is in Phase III clinical trial for the treatment of patients with symptomatic obstructive hypertrophic cardiomyopathy. Cytokinetics, Incorporated has a strategic alliance with Ji Xing Pharmaceuticals Limited. The company was incorporated in 1997 and is headquartered in South San Francisco, California.
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