Analyzing ADC Therapeutics (NYSE:ADCT) and Burning Rock Biotech (NASDAQ:BNR)

ADC Therapeutics (NYSE:ADCT) and Burning Rock Biotech (NASDAQ:BNR) are both small-cap healthcare companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.

Insider & Institutional Ownership

41.1% of ADC Therapeutics shares are owned by institutional investors. Comparatively, 30.0% of Burning Rock Biotech shares are owned by institutional investors. 5.1% of ADC Therapeutics shares are owned by insiders. Comparatively, 30.3% of Burning Rock Biotech shares are owned by 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.

Volatility and Risk

ADC Therapeutics has a beta of 1.82, indicating that its stock price is 82% more volatile than the S&P 500. Comparatively, Burning Rock Biotech has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for ADC Therapeutics and Burning Rock Biotech, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ADC Therapeutics	1	2	3	0	2.33
Burning Rock Biotech	1	0	0	0	1.00

ADC Therapeutics presently has a consensus target price of $5.00, indicating a potential upside of 271.75%. Given ADC Therapeutics’ stronger consensus rating and higher probable upside, analysts plainly believe ADC Therapeutics is more favorable than Burning Rock Biotech.

Profitability

This table compares ADC Therapeutics and Burning Rock Biotech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ADC Therapeutics	-95.73%	N/A	-28.26%
Burning Rock Biotech	-13.60%	-12.98%	-8.59%

Valuation & Earnings

This table compares ADC Therapeutics and Burning Rock Biotech”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ADC Therapeutics	$81.36 million	2.33	-$142.62 million	($0.52)	-2.59
Burning Rock Biotech	$77.16 million	1.81	-$7.92 million	($0.87)	-15.28

Burning Rock Biotech has lower revenue, but higher earnings than ADC Therapeutics. Burning Rock Biotech is trading at a lower price-to-earnings ratio than ADC Therapeutics, indicating that it is currently the more affordable of the two stocks.

Summary

ADC Therapeutics beats Burning Rock Biotech on 10 of the 14 factors compared between the two stocks.

About ADC Therapeutics

ADC Therapeutics is a biotechnology company headquartered in Epalinges, Switzerland. It develops antibody-drug conjugates (ADCs), medicines designed to use antibodies to deliver cell-killing agents to cancer cells. Its research has focused on blood cancers and solid tumors. The company’s lead product, ZYNLONTA (loncastuximab tesirine-lpyl), is an ADC that targets CD19. In the United States, it is approved for adults with relapsed or refractory large B-cell lymphoma after they have received two or more prior systemic treatments.

About Burning Rock Biotech

Burning Rock Biotech is a precision oncology company that develops and provides next-generation sequencing tests for cancer. Its testing uses tissue and blood samples to help inform treatment decisions, monitor disease and support cancer research. The company also provides research and clinical-trial services to pharmaceutical companies, including support for the development of cancer therapies and diagnostic tests. Burning Rock is headquartered in Guangzhou, China, and its business primarily serves the Chinese healthcare and life sciences markets.