Reviewing Q32 Bio (NASDAQ:QTTB) & Ardelyx (NASDAQ:ARDX)

Q32 Bio (NASDAQ:QTTB) and Ardelyx (NASDAQ:ARDX) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Q32 Bio and Ardelyx”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Q32 Bio	-$6.65 million	-4.16	-$112.96 million	($14.25)	-0.16
Ardelyx	$333.62 million	3.83	-$39.14 million	($0.16)	-33.50

Ardelyx has higher revenue and earnings than Q32 Bio. Ardelyx is trading at a lower price-to-earnings ratio than Q32 Bio, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Q32 Bio and Ardelyx, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Q32 Bio	0	6	2	0	2.25
Ardelyx	0	2	5	2	3.00

Q32 Bio presently has a consensus target price of $24.86, indicating a potential upside of 995.03%. Ardelyx has a consensus target price of $9.93, indicating a potential upside of 85.23%. Given Q32 Bio’s higher probable upside, research analysts clearly believe Q32 Bio is more favorable than Ardelyx.

Insider and Institutional Ownership

31.3% of Q32 Bio shares are held by institutional investors. Comparatively, 58.9% of Ardelyx shares are held by institutional investors. 16.1% of Q32 Bio shares are held by company insiders. Comparatively, 5.9% of Ardelyx shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Q32 Bio and Ardelyx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Q32 Bio	N/A	-146.18%	-54.49%
Ardelyx	-11.73%	-24.87%	-10.51%

Volatility and Risk

Q32 Bio has a beta of -0.32, suggesting that its stock price is 132% less volatile than the S&P 500. Comparatively, Ardelyx has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Summary

Ardelyx beats Q32 Bio on 11 of the 15 factors compared between the two stocks.

About Q32 Bio

Q32 Bio Inc., a clinical-stage biotechnology company, develops biologic therapeutics to restore healthy immune balance in patients with autoimmune and inflammatory diseases driven by pathological immune dysfunction in the United States. Its lead product candidate is ADX-097, a humanized anti-C3d monoclonal antibody fusion protein to restore complement regulation, which has completed Phase I clinical trial for the treatment of renal and other complement-mediated diseases of high unmet need, including lupus nephritis, immunoglobulin A nephropathy, complement component 3 glomerulopathy, and anti-neutrophil cytoplasmic antibody-associated vasculitis. The company is also developing Bempikibart (ADX-914), a fully human antiinterleukin-7 receptor alpha antagonist monoclonal antibody designed to re-regulate adaptive immune function by blocking signaling mediated by interleukin-7 and thymic stromal lymphopoietin that is Phase II clinical trial for the treatment of atopic dermatitis and alopecia areata. Q32 Bio Inc. was formerly known as AdMIRx Inc. and changed its name to Q32 Bio Inc. in April 2020. The company was founded in 2017 and is based in Waltham, Massachusetts.

About Ardelyx

Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.