Which stock Worth more Value? Adamas Pharmaceuticals, Inc. (ADMS) or Royal Dutch Shell PLC (RDS-A)

The shares of Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) and Royal Dutch Shell PLC (NYSE:RDS-A) were among the active stocks of the last trading sessions. Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) declined to -29.94% closing at the price of $11.89 whereas the shares of Royal Dutch Shell PLC (NYSE:RDS-A) declined -1.39% with the decrease of -0.88 points closing at the price of $62.25. Adamas Pharmaceuticals, Inc. has currently decrease -62.06% in its stock over the period of 6-months while its rival Royal Dutch Shell PLC subtracted -10.73% 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 Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) is -51.1% while the ROI of Royal Dutch Shell PLC (NYSE:RDS-A) is 4.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ADMS’s EBITDA Margin is -3.48 whereas RDS-A’s is 6.51.

Both the profitability ratios suggest that Royal Dutch Shell PLC (NYSE:RDS-A) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) reported $-1.22/share EPS for the previous quarter where analysts were predicting an EPS to be $-1.34/share Thus beating the analyst Estimates with a Surprise Factor of 9 Percent. While, Royal Dutch Shell PLC (NYSE:RDS-A) reported EPS of $1.34/share in the last quarter. The analysts projected EPS of $1.5/share depicting a Surprise of -10.7 Percent.

Taking a look at Earnings per Share, Adamas Pharmaceuticals, Inc. tends to be beating the analyst estimates more than Royal Dutch Shell PLC. so ADMS is more profitable than RDS-A.

EPS Growth Rate: ADMS’s 31.4% versus RDS-A’s 7%

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 Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS) is predicted at 31.4% while Royal Dutch Shell PLC (NYSE:RDS-A) stands at 7%. These numbers suggest that ADMS 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 ADMS stands at 8.9 while RDS-A is at 1.2 whereas the debt ratio of the prior is 1.01 while the debt ratio of the later is 0.4.

The values of the both ratios suggest that ADMS is more suitable investment when the liquidity and risk is the main concern.

Analyst Recommendations

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 1.9 for ADMS and 1.7 for RDS-A which means ADMS has Buy rating whereas RDS-A 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 ADMS is $52.55 which is 77.37% of its current price while RDS-A has price target of 83.67 which is 25.6% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

ADMS currently has price to earning P/E ratio of 0 whereas RDS-A has 11.05 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 9.22.

The price to Book P/B for ADMS is 2.83, Price to Sale is at 21.66 and for RDS-A these ratios stand at 1.31 and 0.71.