The shares of Amneal Pharmaceuticals, Inc. (NYSE:AMRX) and Nektar Therapeutics (NASDAQ:NKTR) were among the active stocks of the last trading sessions. Amneal Pharmaceuticals, Inc. (NYSE:AMRX) declined to -2.68% closing at the price of $19.99 whereas the shares of Nektar Therapeutics (NASDAQ:NKTR) declined -1.24% with the decrease of -0.65 points closing at the price of $51.76. Amneal Pharmaceuticals, Inc. has currently increase 7.47% in its stock over the period of 6-months while its rival Nektar Therapeutics subtracted -49.62% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Amneal Pharmaceuticals, Inc. (NYSE:AMRX) is -43.4% while the ROI of Nektar Therapeutics (NASDAQ:NKTR) is -18.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AMRX’s EBITDA Margin is 15.44 whereas NKTR’s is 7.74.
Both the profitability ratios suggest a mixed sentiment for Amneal Pharmaceuticals, Inc. (NYSE:AMRX) and Nektar Therapeutics (NASDAQ:NKTR).
EPS & Surprise Factor
Amneal Pharmaceuticals, Inc. (NYSE:AMRX) reported $0.24/share EPS for the previous quarter where analysts were predicting an EPS to be $0.22/share Thus beating the analyst Estimates with a Surprise Factor of 9.1 Percent. While, Nektar Therapeutics (NASDAQ:NKTR) reported EPS of $5.33/share in the last quarter. The analysts projected EPS of $5.22/share depicting a Surprise of 2.1 Percent.
Taking a look at Earnings per Share, Amneal Pharmaceuticals, Inc. tends to be beating the analyst estimates more than Nektar Therapeutics. so AMRX is more profitable than NKTR.
Technical Analysis of Amneal Pharmaceuticals, Inc. & Nektar Therapeutics
Moving average convergence divergence (MACD) shows that Amneal Pharmaceuticals, Inc. (NYSE:AMRX) is on a PRICE RELATIVITY trend While Nektar Therapeutics (NASDAQ:NKTR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Amneal Pharmaceuticals, Inc. was in BEARISH territory and Nektar Therapeutics was in BEARISH territory.
AMRX’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While NKTR’s candle is BEARISH with HIGH.
EPS Growth Rate: AMRX’s 42% versus NKTR’s -7.3%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Amneal Pharmaceuticals, Inc. (NYSE:AMRX) is predicted at 42% while Nektar Therapeutics (NASDAQ:NKTR) stands at -7.3%. These numbers suggest that AMRX is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of AMRX stands at 2 while NKTR is at 19.7 whereas the debt ratio of the prior is 5.62 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.4 for AMRX and 1.8 for NKTR which means AMRX has Hold rating whereas NKTR has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for AMRX is $23.92 which is 16.43% of its current price while NKTR has price target of 89.38 which is 42.09% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
AMRX currently has price to earning P/E ratio of 0 whereas NKTR has 10.58 while the forward P/E ratio for the prior stands at 13.89 and for the later it depicts the value of 0.
The price to Book P/B for AMRX is 5.14, Price to Sale is at 5.5 and for NKTR these ratios stand at 4.77 and 6.46.