Financial Review: Pacific Biosciences of California (NASDAQ:PACB) & Medpace (NASDAQ:MEDP)

Medpace (NASDAQ:MEDP) and Pacific Biosciences of California (NASDAQ:PACB) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Institutional & Insider Ownership

78.0% of Medpace shares are owned by institutional investors. 20.5% of Medpace shares are owned by insiders. Comparatively, 3.7% of Pacific Biosciences of California shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Medpace and Pacific Biosciences of California, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medpace	0	11	2	0	2.15
Pacific Biosciences of California	2	2	1	0	1.80

Medpace currently has a consensus target price of $584.18, suggesting a potential upside of 1.66%. Pacific Biosciences of California has a consensus target price of $1.83, suggesting a potential upside of 27.76%. Given Pacific Biosciences of California’s higher possible upside, analysts clearly believe Pacific Biosciences of California is more favorable than Medpace.

Risk and Volatility

Medpace has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Pacific Biosciences of California has a beta of 2.31, meaning that its share price is 131% more volatile than the S&P 500.

Earnings and Valuation

This table compares Medpace and Pacific Biosciences of California”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medpace	$2.53 billion	6.34	$451.12 million	$17.06	33.68
Pacific Biosciences of California	$160.01 million	2.79	-$546.38 million	($0.43)	-3.34

Medpace has higher revenue and earnings than Pacific Biosciences of California. Pacific Biosciences of California is trading at a lower price-to-earnings ratio than Medpace, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Medpace and Pacific Biosciences of California’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medpace	17.67%	110.15%	24.84%
Pacific Biosciences of California	-80.35%	-571.06%	-18.82%

Summary

Medpace beats Pacific Biosciences of California on 12 of the 14 factors compared between the two stocks.

About Medpace

Medpace Holdings, Inc. engages in the provision of outsourced clinical development services to the biotechnology, pharmaceutical and medical device industries. Its services include medical department, clinical trial management, data-driven feasibility, study-start-up, clinical monitoring, regulatory affairs, patient recruitment and retention, medical writing, biometrics and data sciences, pharmacovigilance, core laboratory, laboratories, clinics, and quality assurance. The company was founded by August James Troendle in 1992 and is headquartered in Cincinnati, OH.

About Pacific Biosciences of California

Pacific Biosciences of California, Inc. designs, develops, and manufactures sequencing solution to resolve genetically complex problems. The company provides sequencing systems; consumable products, including single molecule real-time (SMRT) technology; long-red sequencing; and various reagent kits designed for specific workflow, such as preparation kit to convert DNA into SMRTbell double-stranded DNA library formats, including molecular biology reagents, such as ligase, buffers, and exonucleases. It also offers binding kits, such as modified DNA polymerase used to bind SMRTbell libraries to the polymerase in preparation for sequencing; and sequencing kits comprise reagents required for on-instrument, real-time sequencing, including the phospholinked nucleotides. In addition, it provides revio system + sequel systems which conduct, monitor, and analyze single-molecule biochemical reactions in real time; SBB short-read sequencing; onso instrument conducts, monitors, and analyzes SBB biochemical reactions; and SBB consumable, including flow cells, clustering, and sequencing reagent kits. The company serves academic and governmental research institutions; commercial testing and service laboratories; genome centers; public health labs, hospitals and clinical research institutes, and contract research organizations; pharmaceutical companies; and agricultural companies. It markets its products through a sales force and distribution partners in Asia, Australia, Europe, the Middle East, Africa, and Latin America. It has a development and commercialization agreement with Invitae Corporation; and a collaboration with Radboud University Medical to explore genetic causes of rare and genetic diseases. The company was formerly known as Nanofluidics, Inc. and changed its name to Pacific Biosciences of California, Inc. in 2005. Pacific Biosciences of California, Inc. was incorporated in 2000 and is headquartered in Menlo Park, California.