Denali Therapeutics (NASDAQ:DNLI) and Aerie Pharmaceuticals (NASDAQ:AERI) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Volatility and Risk

Denali Therapeutics has a beta of 2.11, suggesting that its stock price is 111% more volatile than the S&P 500. Comparatively, Aerie Pharmaceuticals has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Denali Therapeutics and Aerie Pharmaceuticals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Denali Therapeutics 0 1 1 0 2.50
Aerie Pharmaceuticals 1 0 10 0 2.82

Denali Therapeutics currently has a consensus price target of $25.50, indicating a potential upside of 2.66%. Aerie Pharmaceuticals has a consensus price target of $79.18, indicating a potential upside of 106.74%. Given Aerie Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts clearly believe Aerie Pharmaceuticals is more favorable than Denali Therapeutics.

Institutional and Insider Ownership

71.5% of Denali Therapeutics shares are owned by institutional investors. 21.3% of Denali Therapeutics shares are owned by company insiders. Comparatively, 10.5% of Aerie Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Denali Therapeutics and Aerie Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Denali Therapeutics -28.06% -7.12% -6.06%
Aerie Pharmaceuticals N/A -91.80% -63.63%

Valuation & Earnings

This table compares Denali Therapeutics and Aerie Pharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Denali Therapeutics $129.16 million 18.33 -$36.24 million ($0.39) -63.69
Aerie Pharmaceuticals $24.18 million 72.74 -$232.57 million ($4.65) -8.24

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

Summary

Denali Therapeutics beats Aerie Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

Denali Therapeutics Company Profile

Denali Therapeutics Inc., a biopharmaceutical company, discovers and develops therapeutic candidates for neurodegenerative diseases in the United States. The company offers leucine-rich repeat kinase 2 (LRRK2) inhibitor product candidates, including DNL201 and DNL151, which are in Phase 1 clinical trials for Parkinson's disease. It is also developing receptor interacting serine/threonine protein kinase 1 (RIPK1) product candidates, such as DNL747, a selective and brain-penetrant small molecule RIPK1 inhibitor product candidate that is in Phase 1b clinical trial for Alzheimer's disease and amyotrophic lateral sclerosis (ALS). In addition, the company develops enzyme transport vehicle: iduronate 2-sulfatase, an enzyme replacement therapy program for MPS II, a lysosomal storage disorder; antibody transport vehicle (ATV): alpha-synuclein (aSyn) program, a protein that spreads throughout the brain in Parkinson's disease; ATV: triggering receptor expressed in myeloid cells 2, a therapeutic candidate designed to rescue microglial function in Alzheimer's disease; and ATV: Tau, a therapeutic targeting the spreading of Tau. Further, it is developing LF1, an undisclosed large molecule program to treat neurodegenerative diseases. Additionally, the company has various seed programs under the research, discovery, and preclinical stages of development. Denali Therapeutics Inc. has collaboration agreement with Takeda Pharmaceutical Company and Genentech, Inc., Sanofi, F-star Gamma Limited, F-star Biotechnologische Forschungs-Und Entwicklungsges M.B.H, F-star Biotechnology Limited, SIRION Biotech GmbH, Genzyme Corporation, Harvard University, the Michael J. Fox Foundation, and Centogene. The company was formerly known as SPR Pharma Inc. and changed its name to Denali Therapeutics Inc. in March 2015. Denali Therapeutics Inc. was incorporated in 2013 and is based in South San Francisco, California.

Aerie Pharmaceuticals Company Profile

Aerie Pharmaceuticals, Inc., an ophthalmic pharmaceutical company, focuses on the discovery, development, and commercialization of first-in-class therapies for the treatment of glaucoma, retinal diseases, and other eye diseases. Its lead product is Rhopressa, a once-daily eye drop to reduce elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension. The company's advanced-stage product candidate is Roclatan, a once-daily eye drop to reduce IOP to treat patients with open-angle glaucoma and ocular hypertension. Aerie Pharmaceuticals, Inc. has a collaborative research, development, and licensing agreement with DSM. Aerie Pharmaceuticals, Inc. was founded in 2005 and is headquartered in Durham, North Carolina.

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