Wave Life Sciences (NASDAQ:WVE – Get Free Report) and Rhythm Pharmaceuticals (NASDAQ:RYTM – Get Free Report) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.
Institutional and Insider Ownership
89.7% of Wave Life Sciences shares are owned by institutional investors. 29.1% of Wave Life Sciences shares are owned by insiders. Comparatively, 5.6% of Rhythm Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Wave Life Sciences and Rhythm Pharmaceuticals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Wave Life Sciences | -66.50% | -280.57% | -52.90% |
| Rhythm Pharmaceuticals | -230.07% | -367.36% | -77.47% |
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Wave Life Sciences | $108.30 million | 13.32 | -$57.51 million | ($0.79) | -11.90 |
| Rhythm Pharmaceuticals | $130.13 million | 24.68 | -$184.68 million | ($4.35) | -11.68 |
Wave Life Sciences has higher earnings, but lower revenue than Rhythm Pharmaceuticals. Wave Life Sciences is trading at a lower price-to-earnings ratio than Rhythm Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Wave Life Sciences and Rhythm Pharmaceuticals, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Wave Life Sciences | 0 | 1 | 8 | 1 | 3.00 |
| Rhythm Pharmaceuticals | 0 | 1 | 12 | 0 | 2.92 |
Wave Life Sciences currently has a consensus target price of $22.60, suggesting a potential upside of 140.43%. Rhythm Pharmaceuticals has a consensus target price of $69.31, suggesting a potential upside of 36.46%. Given Wave Life Sciences’ stronger consensus rating and higher probable upside, equities analysts plainly believe Wave Life Sciences is more favorable than Rhythm Pharmaceuticals.
Volatility and Risk
Wave Life Sciences has a beta of -1.04, suggesting that its stock price is 204% less volatile than the S&P 500. Comparatively, Rhythm Pharmaceuticals has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500.
Summary
Wave Life Sciences beats Rhythm Pharmaceuticals on 11 of the 15 factors compared between the two stocks.
About Wave Life Sciences
Wave Life Sciences Ltd., a clinical-stage biotechnology company, designs, develops, and commercializes ribonucleic acid (RNA) medicines through PRISM, a discovery and drug development platform. The company's RNA medicines platform, PRISM, combines multiple modalities, chemistry innovation, and deep insights into human genetics to deliver scientific breakthroughs that treat both rare and prevalent disorders. It is developing WVE-006, a RNA editing oligonucleotide for the treatment of alpha-1 antitrypsin deficiency; siRNA clinical candidate for the treatment of obesity and other metabolic disorders; WVE-N531, a exon skipping oligonucleotide for the treatment of duchenne muscular dystrophy; and WVE-003, an antisense silencing oligonucleotide for the treatment of Huntington's disease (HD). The company has collaboration agreements with GlaxoSmithKline for the research, development, and commercialization of oligonucleotide therapeutics; Takeda Pharmaceutical Company Limited for the research, development, and commercialization of oligonucleotide therapeutics for disorders of the Central Nervous System; and Asuragen, Inc. for the development and potential commercialization of companion diagnostics for investigational allele-selective therapeutic programs targeting HD. Wave Life Sciences Ltd. was incorporated in 2012 and is based in Singapore.
About Rhythm Pharmaceuticals
Rhythm Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the rare neuroendocrine diseases. The company's lead product candidate is IMCIVREE (setmelanotide), a rare melanocortin-4 receptor for the treatment of pro-opiomelanocortin (POMC), proprotein convertase subtilisin/kexin type 1, leptin receptor (LEPR) deficiency obesity, and Bardet-Biedl and Alström syndrome. It is in Phase 3 clinical trials for treating POMC or LEPR heterozygous deficiency obesities, steroid receptor coactivator 1 deficiency obesity, SH2B1 deficiency obesity, MC4 receptor deficiency obesity, and other MC4R disorders. The company has licensing agreements with LG Chem, Ltd; Ipsen Pharma S.A.S; Camurus; RareStone Group Ltd.; and LG Chem, Ltd. The company was formerly known as Rhythm Metabolic, Inc. and changed its name to Rhythm Pharmaceuticals, Inc. in October 2015. Rhythm Pharmaceuticals, Inc. was founded in 2008 and is headquartered in Boston, Massachusetts.
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