Analyzing Alector (NASDAQ:ALEC) and Recursion Pharmaceuticals (NASDAQ:RXRX)

Recursion Pharmaceuticals (NASDAQ:RXRX) and Alector (NASDAQ:ALEC) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Profitability

This table compares Recursion Pharmaceuticals and Alector’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Recursion Pharmaceuticals	-579.52%	-76.56%	-55.68%
Alector	-257.54%	-108.77%	-27.03%

Institutional and Insider Ownership

89.1% of Recursion Pharmaceuticals shares are owned by institutional investors. Comparatively, 85.8% of Alector shares are owned by institutional investors. 15.8% of Recursion Pharmaceuticals shares are owned by insiders. Comparatively, 9.1% of Alector shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Recursion Pharmaceuticals and Alector”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Recursion Pharmaceuticals	$58.49 million	39.59	-$328.07 million	($1.66)	-3.47
Alector	$100.56 million	0.94	-$130.39 million	($1.23)	-0.77

Alector has higher revenue and earnings than Recursion Pharmaceuticals. Recursion Pharmaceuticals is trading at a lower price-to-earnings ratio than Alector, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Recursion Pharmaceuticals has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Alector has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Recursion Pharmaceuticals and Alector, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Recursion Pharmaceuticals	0	4	2	0	2.33
Alector	2	2	3	0	2.14

Recursion Pharmaceuticals presently has a consensus price target of $8.20, suggesting a potential upside of 42.36%. Alector has a consensus price target of $3.50, suggesting a potential upside of 268.42%. Given Alector’s higher probable upside, analysts clearly believe Alector is more favorable than Recursion Pharmaceuticals.

Summary

Alector beats Recursion Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

About Recursion Pharmaceuticals

Recursion Pharmaceuticals, Inc. operates as a clinical-stage biotechnology company, engages in the decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery. The company develops REC-994, which is in Phase 2 clinical trial to treat cerebral cavernous malformation; REC-2282, which is in Phase 2/3 clinical trial for the treatment of neurofibromatosis type 2; REC-4881, which is in Phase 1b/2 clinical trial to treat familial adenomatous polyposis; REC-3964, which is in Phase 1 clinical trial to treat Clostridioides difficile infection; and REC-4881, which is in Phase 2 clinical trial to treat AXIN1 or APC mutant cancers. Its preclinical stage product includes RBM39 to treat HR-proficient ovarian cancer. The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Roche & Genentech; and Takeda Pharmaceutical Company Limited. Recursion Pharmaceuticals, Inc. was incorporated in 2013 and is headquartered in Salt Lake City, Utah.

About Alector

Alector, Inc., a clinical stage biopharmaceutical company, develops therapies for the treatment of neurodegeneration diseases. Its products include AL001, an immune activity in the brain with genetic links to multiple neurodegenerative disorders, which is in Phase III clinical trial for the treatment of frontotemporal dementia, Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis diseases; and AL101 that is in Phase I clinical trial for the treatment of neurodegenerative diseases, including Alzheimer's and Parkinson's diseases. The company also offers AL002, a product candidate that is in Phase II clinical trial for the treatment of Alzheimer's disease. Alector, Inc. has a collaboration agreement with Adimab, LLC for the research and development of antibodies; and a strategic collaboration agreement with GlaxoSmithKline plc for the development and commercialization of monoclonal antibodies, such as AL001 and AL101 to treat neurodegenerative diseases. The company was founded in 2013 and is headquartered in South San Francisco, California.