Critical Analysis: Exelixis (NASDAQ:EXEL) & SQZ Biotechnologies (NYSE:SQZ)

Exelixis (NASDAQ:EXEL) and SQZ Biotechnologies (NYSE:SQZ) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Volatility & Risk

Exelixis has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, SQZ Biotechnologies has a beta of 2.34, indicating that its stock price is 134% more volatile than the S&P 500.

Insider and Institutional Ownership

85.3% of Exelixis shares are held by institutional investors. Comparatively, 38.5% of SQZ Biotechnologies shares are held by institutional investors. 2.9% of Exelixis shares are held by company insiders. Comparatively, 16.0% of SQZ Biotechnologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Exelixis and SQZ Biotechnologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Exelixis	1	5	14	0	2.65
SQZ Biotechnologies	0	0	0	0	0.00

Exelixis presently has a consensus target price of $31.44, indicating a potential downside of 7.54%. Given Exelixis’ stronger consensus rating and higher probable upside, research analysts clearly believe Exelixis is more favorable than SQZ Biotechnologies.

Profitability

This table compares Exelixis and SQZ Biotechnologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Exelixis	22.43%	20.99%	16.07%
SQZ Biotechnologies	-369.96%	-119.83%	-59.90%

Earnings and Valuation

This table compares Exelixis and SQZ Biotechnologies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Exelixis	$1.83 billion	5.31	$207.76 million	$1.56	21.80
SQZ Biotechnologies	$18.16 million	0.04	-$79.46 million	($2.61)	-0.01

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

Summary

Exelixis beats SQZ Biotechnologies on 12 of the 14 factors compared between the two stocks.

About Exelixis

Exelixis, Inc., an oncology company, focuses on the discovery, development, and commercialization of new medicines for difficult-to-treat cancers in the United States. The company offers CABOMETYX tablets for the treatment of patients with advanced renal cell carcinoma who received prior anti-angiogenic therapy; and COMETRIQ capsules for the treatment of progressive and metastatic medullary thyroid cancer. Its CABOMETYX and COMETRIQ are derived from cabozantinib, an inhibitor of multiple tyrosine kinases, including MET, AXL, RET, and VEGF receptors. The company also offers COTELLIC, an inhibitor of MEK as a combination regimen to treat specific forms of advanced melanoma; and MINNEBRO, an oral non-steroidal selective blocker of the mineralocorticoid receptor for the treatment of hypertension in Japan. It develops zanzalintinib, a novel, potent, next-generation oral tyrosine kinase inhibitor (TKI) that targets VEGF receptors, MET and the TAM kinases (TYRO3, AXL and MER); and XB002, a next-generation tissue factor (TF)-targeting ADC, administered via intravenous infusion and composed of a human monoclonal antibody (mAb) against TF that is conjugated to an auristatin-based microtubulin inhibitor (MTI) payload. It has research collaborations and license agreements with Ipsen Pharma SAS; Takeda Pharmaceutical Company Ltd.; F. Hoffmann-La Roche Ltd.; Redwood Bioscience, Inc.; R.P. Scherer Technologies, LLC; Catalent Pharma Solutions, Inc.; NBE Therapeutics AG; Aurigene Discovery Technologies Limited; Iconic Therapeutics, Inc.; Invenra, Inc.; StemSynergy Therapeutics, Inc.; Genentech, Inc.; Bristol-Myers Squibb Company; and Daiichi Sankyo Company, Limited, as well as clinical development agreement with Sairopa B.V. for ADU-1805. The company was formerly known as Exelixis Pharmaceuticals, Inc. and changed its name to Exelixis, Inc. in February 2000. Exelixis, Inc. was incorporated in 1994 and is headquartered in Alameda, California.

About SQZ Biotechnologies

SQZ Biotechnologies Company, a clinical-stage biotechnology company, develops cell therapies for patients with cancer, autoimmune, infectious diseases, and other serious conditions. Its lead product candidate is SQZ-PBMC-HPV, from its SQZ Antigen Presenting Cells platform, which is in a Phase I clinical trial as a monotherapy and in combination with immuno-oncology agents for the treatment of HPV16+ advanced or metastatic solid tumors, including cervical, head-and-neck, anal, penile, vulvar, and vaginal cancer. The company also develops SQZ-AAC-HPV, which is in a Phase I clinical trial for the treatment of HPV16+ advanced or metastatic solid tumors in monotherapy and in combinations with immune-oncology agents. Its additional platforms in development are SQZ Activating Antigen Carriers; and SQZ Tolerizing Antigen Carriers. The Company was incorporated in 2013 and is headquartered in Watertown, Massachusetts.