Financial Review: Anavex Life Sciences (NASDAQ:AVXL) & Opthea (NASDAQ:OPT)

Opthea (NASDAQ:OPT) and Anavex Life Sciences (NASDAQ:AVXL) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Volatility and Risk

Opthea has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Anavex Life Sciences has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares Opthea and Anavex Life Sciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Opthea	N/A	N/A	N/A
Anavex Life Sciences	N/A	-30.32%	-27.87%

Institutional and Insider Ownership

56.0% of Opthea shares are held by institutional investors. Comparatively, 31.6% of Anavex Life Sciences shares are held by institutional investors. 3.2% of Opthea shares are held by insiders. Comparatively, 11.6% of Anavex Life Sciences shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Opthea and Anavex Life Sciences’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Opthea	$110,000.00	1,762.62	-$142.52 million	N/A	N/A
Anavex Life Sciences	N/A	N/A	-$47.51 million	($0.54)	-7.00

Anavex Life Sciences has lower revenue, but higher earnings than Opthea.

Analyst Recommendations

This is a summary of current ratings and target prices for Opthea and Anavex Life Sciences, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Opthea	0	0	2	0	3.00
Anavex Life Sciences	0	0	1	0	3.00

Opthea presently has a consensus price target of $14.00, suggesting a potential upside of 321.69%. Anavex Life Sciences has a consensus price target of $40.00, suggesting a potential upside of 958.20%. Given Anavex Life Sciences’ higher probable upside, analysts plainly believe Anavex Life Sciences is more favorable than Opthea.

Summary

Opthea beats Anavex Life Sciences on 6 of the 9 factors compared between the two stocks.

About Opthea

Opthea Limited, a clinical stage biopharmaceutical company, engages in the development and commercialization of therapies primarily for eye disease in Australia. The company's development activities are based on the intellectual property portfolio covering Vascular Endothelial Growth Factors (VEGF) VEGF-C, VEGF-D, and VEGF Receptor-3 for the treatment of diseases associated with blood and lymphatic vessel growth, as well as vascular leakage. Its lead product candidate is Sozinibercept (OPT 302), a soluble form of vascular endothelial growth factor receptor-3 VEGFR-3, currently under Phase 3 clinical development as a novel therapy for wet age-related macular degeneration and diabetic macular edema. The company was formerly known as Circadian Technologies Limited and changed its name to Opthea Limited in December 2015. Opthea Limited was incorporated in 1984 and is based in South Yarra, Australia.

About Anavex Life Sciences

Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of therapeutics for the treatment of central nervous system diseases. Its lead product candidate is ANAVEX 2-73 for the treatment of Alzheimer's disease and Parkinson's disease, as well as other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder; and infantile spasms, Fragile X syndrome, and Angelman syndrome. The company's drug candidate also comprises ANAVEX 3-71, which is in clinical trial for the treatment of schizophrenia, frontotemporal dementia, and Alzheimer's disease. Its preclinical drug candidates include ANAVEX 1-41 for the treatment of depression, stroke, and neurogenerative disease; ANAVEX 1066 for the potential treatment of neuropathic and visceral pain; and ANAVEX 1037 to treat prostate and pancreatic cancer. The company was incorporated in 2004 and is headquartered in New York, New York.