Eton Pharmaceuticals (NASDAQ:ETON – Get Free Report) and Galecto (NASDAQ:GLTO – Get Free Report) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Eton Pharmaceuticals and Galecto, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eton Pharmaceuticals | 0 | 0 | 2 | 1 | 3.33 |
| Galecto | 0 | 0 | 1 | 0 | 3.00 |
Eton Pharmaceuticals presently has a consensus target price of $24.00, indicating a potential upside of 38.97%. Galecto has a consensus target price of $10.00, indicating a potential upside of 119.78%. Given Galecto’s higher possible upside, analysts plainly believe Galecto is more favorable than Eton Pharmaceuticals.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eton Pharmaceuticals | $31.64 million | 14.22 | -$940,000.00 | ($0.22) | -78.50 |
| Galecto | N/A | N/A | -$38.35 million | ($19.14) | -0.24 |
Eton Pharmaceuticals has higher revenue and earnings than Galecto. Eton Pharmaceuticals is trading at a lower price-to-earnings ratio than Galecto, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
27.9% of Eton Pharmaceuticals shares are owned by institutional investors. Comparatively, 14.2% of Galecto shares are owned by institutional investors. 14.9% of Eton Pharmaceuticals shares are owned by company insiders. Comparatively, 11.9% of Galecto shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Eton Pharmaceuticals and Galecto’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eton Pharmaceuticals | -15.81% | -36.29% | -16.84% |
| Galecto | N/A | -76.96% | -66.59% |
Risk & Volatility
Eton Pharmaceuticals has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Galecto has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.
Summary
Eton Pharmaceuticals beats Galecto on 11 of the 14 factors compared between the two stocks.
About Eton Pharmaceuticals
Eton Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on developing, acquiring, and commercializing pharmaceutical products for rare diseases. The company offers ALKINDI SPRINKLE, a replacement therapy for adrenocortical insufficiency in children under 17 years of age; Carglumic Acid for the treatment of acute and chronic hyperammonemia due to N-acetylglutamate Synthase deficiency; Betaine Anhydrous for the treatment of homocystinuria; and Nitisinone for the treatment of tyrosinemia type 1. It also provides Zeneo hydrocortisone autoinjector for the treatment of adrenal crisis. Eton Pharmaceuticals, Inc. was incorporated in 2017 and is based in Deer Park, Illinois.
About Galecto
Galecto, Inc., a clinical-stage biotechnology company, develops molecules for the treatment of fibrosis, cancer, inflammation, and other related diseases. The company's lead product candidate is GB2064, which is in Phase IIa for the treatment of myelofibrosis. It also develops GB2064, a selective oral small molecule inhibitor of LOXL2 that is in Phase 2a clinical trial for the treatment of fibrotic diseases, including cancer and myelofibrosis; and GB1211, a selective oral galectin-3 inhibitor that is in Phase IIa for the treatment of cancer, as well as in Phase Ib/IIa for fibrosis. Galecto, Inc. was founded in 2011 and is headquartered in Copenhagen, Denmark.
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