Intrexon Corporation (NASDAQ:XON) shares are down more than -14.22% this year and recently increased 2.56% or $0.14 to settle at $5.61. MobileIron, Inc. (NASDAQ:MOBL), on the other hand, is up 5.01% year to date as of 11/14/2019. It currently trades at $4.82 and has returned -1.23% during the past week.
Intrexon Corporation (NASDAQ:XON) and MobileIron, Inc. (NASDAQ:MOBL) are the two most active stocks in the Biotechnology industry based on todays trading volumes. Investors are clearly interested in the two names, but is one a better choice than the other? We will compare the two companies across growth, profitability, risk, valuation, and insider trends to answer this question.
Companies that can consistently grow earnings at a high compound rate usually have the greatest potential to create value for shareholders in the long-run. Analysts expect XON to grow earnings at a 42.50% annual rate over the next 5 years.
A high growth rate isnt necessarily valuable to investors. In fact, companies that overinvest in low return projects just to achieve a high growth rate can actually destroy shareholder value. Profitability and returns are a measure of the quality of a companys business and its growth opportunities. Well use Return on Investment (ROI) to measure this. XONs ROI is -84.20% while MOBL has a ROI of -81.70%. The interpretation is that MOBLs business generates a higher return on investment than XONs.
If theres one thing investors care more about than earnings, its cash flow. XONs free cash flow (FCF) per share for the trailing twelve months was -0.31. Comparatively, MOBLs free cash flow per share was -0.06. On a percent-of-sales basis, XONs free cash flow was -0.03% while MOBL converted -0% of its revenues into cash flow. This means that, for a given level of sales, MOBL is able to generate more free cash flow for investors.
Liquidity and leverage ratios measure a companys ability to meet short-term obligations and longer-term debts. XON has a current ratio of 3.50 compared to 1.30 for MOBL. This means that XON can more easily cover its most immediate liabilities over the next twelve months. XONs debt-to-equity ratio is 0.92 versus a D/E of 0.00 for MOBL. XON is therefore the more solvent of the two companies, and has lower financial risk.
XON trades at a P/B of 3.08, and a P/S of 6.87, compared to a forward P/E of 166.21, a P/B of 13.39, and a P/S of 2.70 for MOBL. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.
Analyst Price Targets and Opinions
Just because a stock is cheaper doesnt mean theres more value to be had. In order to assess value we need to compare the current price to where its likely to trade in the future. XON is currently priced at a -41.99% to its one-year price target of 9.67. Comparatively, MOBL is -33.97% relative to its price target of 7.30. This suggests that XON is the better investment over the next year.
Risk and Volatility
No discussion on value is complete without taking into account risk. Analysts use a stocks beta, which measures the volatility of a stock compared to the overall market, to measure systematic risk. A stock with a beta above 1 is more volatile than the market. Conversely, a beta below 1 implies a below average level of risk. XON has a beta of 2.25 and MOBLs beta is 1.60. MOBLs shares are therefore the less volatile of the two stocks.
Short interest is another tool that analysts use to gauge investor sentiment. It represents the percentage of a stocks tradable shares that are being shorted. XON has a short ratio of 33.75 compared to a short interest of 2.21 for MOBL. This implies that the market is currently less bearish on the outlook for MOBL.
MobileIron, Inc. (NASDAQ:MOBL) beats Intrexon Corporation (NASDAQ:XON) on a total of 8 of the 14 factors compared between the two stocks. MOBL is growing fastly, has higher cash flow per share, has a higher cash conversion rate and has lower financial risk. Finally, MOBL has better sentiment signals based on short interest.
Excerpt from:
Intrexon Corporation (XON) vs. MobileIron, Inc. (MOBL): Comparing the Biotechnology Industrys Most Active Stocks - E Globalist
Recommendation and review posted by G. Smith
