The shares of Alphabet Inc. (NASDAQ:GOOGL) and Exelixis, Inc. (NASDAQ:EXEL) were among the active stocks of the last trading sessions. Alphabet Inc. (NASDAQ:GOOGL) declined to -0.13% closing at the price of $1090.74 whereas the shares of Exelixis, Inc. (NASDAQ:EXEL) declined -1.73% with the decrease of -0.28 points closing at the price of $15.94. Alphabet Inc. has currently increase 5.28% in its stock over the period of 6-months while its rival Exelixis, Inc. subtracted -22.02% 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 Alphabet Inc. (NASDAQ:GOOGL) is 13.7% while the ROI of Exelixis, Inc. (NASDAQ:EXEL) is 55.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, GOOGL’s EBITDA Margin is 18.69 whereas EXEL’s is 14.75.
Both the profitability ratios suggest a mixed sentiment for Alphabet Inc. (NASDAQ:GOOGL) and Exelixis, Inc. (NASDAQ:EXEL).
EPS & Surprise Factor
Alphabet Inc. (NASDAQ:GOOGL) reported $4.54/share EPS for the previous quarter where analysts were predicting an EPS to be $9.59/share Thus lagging the analyst Estimates with a Surprise Factor of -52.7 Percent. While, Exelixis, Inc. (NASDAQ:EXEL) reported EPS of $0.28/share in the last quarter. The analysts projected EPS of $0.16/share depicting a Surprise of 75 Percent.
Taking a look at Earnings per Share, Exelixis, Inc. tends to be beating the analyst estimates more than Alphabet Inc.. so EXEL is more profitable than GOOGL.
Technical Analysis of Alphabet Inc. & Exelixis, Inc.
Moving average convergence divergence (MACD) shows that Alphabet Inc. (NASDAQ:GOOGL) is on a PRICE RELATIVITY trend While Exelixis, Inc. (NASDAQ:EXEL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Alphabet Inc. was in BEARISH territory and Exelixis, Inc. was in BEARISH territory.
GOOGL’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While EXEL’s candle is BEARISH with HIGH.
EPS Growth Rate: GOOGL’s 17.37% versus EXEL’s 34.5%
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 Alphabet Inc. (NASDAQ:GOOGL) is predicted at 17.37% while Exelixis, Inc. (NASDAQ:EXEL) stands at 34.5%. These numbers suggest that EXEL 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 GOOGL stands at 4.2 while EXEL is at 6.9 whereas the debt ratio of the prior is 0 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 1.7 for GOOGL and 2.1 for EXEL which means GOOGL has Buy rating whereas EXEL has Hold 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 GOOGL is $1386.29 which is 21.32% of its current price while EXEL has price target of 29.22 which is 45.45% 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.
GOOGL currently has price to earning P/E ratio of 29.29 whereas EXEL has 15.45 while the forward P/E ratio for the prior stands at 22.65 and for the later it depicts the value of 14.07.
The price to Book P/B for GOOGL is 4.68, Price to Sale is at 6.15 and for EXEL these ratios stand at 6.11 and 7.17.