Critical Analysis: Protara Therapeutics (NASDAQ:TARA) vs. Recursion Pharmaceuticals (NASDAQ:RXRX)

Protara Therapeutics (NASDAQ:TARA) and Recursion Pharmaceuticals (NASDAQ:RXRX) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Profitability

This table compares Protara Therapeutics and Recursion Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Protara Therapeutics	N/A	-38.70%	-36.02%
Recursion Pharmaceuticals	-842.95%	-54.33%	-40.60%

Risk & Volatility

Protara Therapeutics has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500. Comparatively, Recursion Pharmaceuticals has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Institutional & Insider Ownership

38.1% of Protara Therapeutics shares are owned by institutional investors. Comparatively, 89.1% of Recursion Pharmaceuticals shares are owned by institutional investors. 7.6% of Protara Therapeutics shares are owned by company insiders. Comparatively, 8.4% of Recursion Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Protara Therapeutics and Recursion Pharmaceuticals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Protara Therapeutics	N/A	N/A	-$57.44 million	($1.34)	-3.16
Recursion Pharmaceuticals	$74.68 million	24.30	-$644.76 million	($1.20)	-2.85

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Protara Therapeutics and Recursion Pharmaceuticals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Protara Therapeutics	1	0	7	0	2.75
Recursion Pharmaceuticals	1	2	2	0	2.20

Protara Therapeutics presently has a consensus price target of $26.25, indicating a potential upside of 519.83%. Recursion Pharmaceuticals has a consensus price target of $8.10, indicating a potential upside of 136.50%. Given Protara Therapeutics’ stronger consensus rating and higher possible upside, research analysts clearly believe Protara Therapeutics is more favorable than Recursion Pharmaceuticals.

Summary

Protara Therapeutics beats Recursion Pharmaceuticals on 8 of the 13 factors compared between the two stocks.

About Protara Therapeutics

Protara Therapeutics, Inc., a clinical-stage biopharmaceutical company, engages in advancing transformative therapies for the treatment of cancer and rare diseases. The company's lead program is TARA-002, an investigational cell therapy, which is in Phase II clinical trial for the treatment of non-muscle invasive bladder cancer and lymphatic malformations. It is also developing intravenous choline chloride, an investigational phospholipid substrate replacement therapy that is in Phase II clinical trial for patients receiving parenteral nutrition. The company is headquartered in New York, New York.

About Recursion Pharmaceuticals

Recursion Pharmaceuticals, Inc. operates as a clinical-stage biotechnology company, engages in the decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery. The company develops REC-994, which is in Phase 2 clinical trial to treat cerebral cavernous malformation; REC-2282, which is in Phase 2/3 clinical trial for the treatment of neurofibromatosis type 2; REC-4881, which is in Phase 1b/2 clinical trial to treat familial adenomatous polyposis; REC-3964, which is in Phase 1 clinical trial to treat Clostridioides difficile infection; and REC-4881, which is in Phase 2 clinical trial to treat AXIN1 or APC mutant cancers. Its preclinical stage product includes RBM39 to treat HR-proficient ovarian cancer. The company has collaboration and agreement with Bayer AG; the University of Utah Research Foundation; Ohio State Innovation Foundation; Roche & Genentech; and Takeda Pharmaceutical Company Limited. Recursion Pharmaceuticals, Inc. was incorporated in 2013 and is headquartered in Salt Lake City, Utah.