Reviewing Neoleukin Therapeutics (NASDAQ:NLTX) and Chembio Diagnostics (NASDAQ:CEMI)

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Chembio Diagnostics (NASDAQ:CEMI) and Neoleukin Therapeutics (NASDAQ:NLTX) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Profitability

This table compares Chembio Diagnostics and Neoleukin Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chembio Diagnostics -71.88% -72.75% -32.10%
Neoleukin Therapeutics N/A -31.96% -29.43%

Institutional and Insider Ownership

36.2% of Chembio Diagnostics shares are held by institutional investors. Comparatively, 60.2% of Neoleukin Therapeutics shares are held by institutional investors. 3.0% of Chembio Diagnostics shares are held by insiders. Comparatively, 7.1% of Neoleukin Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Chembio Diagnostics and Neoleukin Therapeutics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chembio Diagnostics $34.46 million 2.05 -$13.68 million ($0.79) -4.44
Neoleukin Therapeutics $25.00 million 20.89 -$69.44 million ($0.75) -16.68

Chembio Diagnostics has higher revenue and earnings than Neoleukin Therapeutics. Neoleukin Therapeutics is trading at a lower price-to-earnings ratio than Chembio Diagnostics, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Chembio Diagnostics has a beta of 2.24, meaning that its stock price is 124% more volatile than the S&P 500. Comparatively, Neoleukin Therapeutics has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Chembio Diagnostics and Neoleukin Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chembio Diagnostics 0 5 0 0 2.00
Neoleukin Therapeutics 0 0 6 0 3.00

Chembio Diagnostics presently has a consensus price target of $6.50, indicating a potential upside of 85.19%. Neoleukin Therapeutics has a consensus price target of $21.83, indicating a potential upside of 74.53%. Given Chembio Diagnostics’ higher probable upside, equities analysts clearly believe Chembio Diagnostics is more favorable than Neoleukin Therapeutics.

Summary

Neoleukin Therapeutics beats Chembio Diagnostics on 9 of the 14 factors compared between the two stocks.

About Chembio Diagnostics

Chembio Diagnostics, Inc., together with its subsidiaries, develops, manufactures, and commercializes point-of-care (POC) diagnostic tests that are used to detect or diagnose diseases. The company offers tests for HIV and Syphilis, and Zika virus. It also develops tests for malaria, dengue virus, chikungunya virus, ebola, lassa, marburg, leptospirosis, Rickettsia typhi, Burkholderia pseudomallei, and Orientia tsutsugamushi. In addition, the company develops tests for a specific form of cancer, concussion, and bovine tuberculosis; and handheld optical analyzers for rapid diagnostic tests. It sells its products under the STAT-PAK, SURE CHECK, STAT VIEW, or DPP trademarks, as well as under the private labels of its marketing partners to medical laboratories and hospitals, governmental and public health entities, non-governmental organizations, medical professionals, and retail establishments in the United States and internationally. The company has collaboration agreements with Concussion Science Group Division of Perseus Science Group LLC to develop a POC diagnostic test for traumatic brain injury; Foundation for Innovative New Diagnostics to develop a POC fever panel assay for life-threatening acute febrile illnesses; AstraZeneca to develop a POC test for eosinophilic respiratory disease; and LumiraDx to develop POC diagnostic tests for infectious diseases. Chembio Diagnostics, Inc. was founded in 1985 and is headquartered in Medford, New York.

About Neoleukin Therapeutics

Neoleukin Therapeutics, Inc., a biopharmaceutical company, develops immunotherapies using protein design technology. The company's lead product candidate is NL-201, a computationally-designed de novo protein therapeutic for the treatment of IL-2/IL-15 cancer immunotherapy. It also engages in research activities for the treatment of autoimmunity and allergy. The company was formerly known as Aquinox Pharmaceuticals, Inc. and changed its name to Neoleukin Therapeutics, Inc. in August 2019. Neoleukin Therapeutics, Inc. was founded in 2003 and is headquartered in Seattle, Washington.

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