Analyzing Summit Therapeutics (NASDAQ:SMMT) & Merck KGaA (OTCMKTS:MKKGY)

Summit Therapeutics (NASDAQ:SMMT) and Merck KGaA (OTCMKTS:MKKGY) are both large-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Insider & Institutional Ownership

4.6% of Summit Therapeutics shares are owned by institutional investors. Comparatively, 0.1% of Merck KGaA shares are owned by institutional investors. 83.5% of Summit Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Summit Therapeutics and Merck KGaA”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit Therapeutics	N/A	N/A	-$1.08 billion	($1.60)	-8.95
Merck KGaA	$23.87 billion	0.91	$2.95 billion	$2.25	14.98

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

Volatility & Risk

Summit Therapeutics has a beta of -1.32, meaning that its share price is 232% less volatile than the S&P 500. Comparatively, Merck KGaA has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Summit Therapeutics and Merck KGaA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit Therapeutics	2	6	8	1	2.47
Merck KGaA	0	5	0	0	2.00

Summit Therapeutics currently has a consensus price target of $27.23, suggesting a potential upside of 90.12%. Given Summit Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Summit Therapeutics is more favorable than Merck KGaA.

Profitability

This table compares Summit Therapeutics and Merck KGaA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit Therapeutics	N/A	-291.24%	-243.07%
Merck KGaA	12.07%	8.79%	5.02%

Summary

Merck KGaA beats Summit Therapeutics on 8 of the 14 factors compared between the two stocks.

About Summit Therapeutics

Summit Therapeutics Inc., a biopharmaceutical company, focuses on discovery, development, and commercialization of patient, physician, caregiver, and societal friendly medicinal therapies in the United States, and the United Kingdom. The company’s lead development candidate is Ivonescimab, a bispecific antibody for immunotherapy through blockade of PD-1 with the anti-angiogenesis; and anti-infectives portfolio includes SMT-738, a novel class of precision antibiotics for the treatment of multidrug resistant infections, which primarily includes carbapenem-resistant Enterobacteriaceae infections. It has a collaboration and license agreement with Akeso, Inc. and its affiliates to develop and commercialize ivonescimab, as well as strategic collaboration with The University of Texas MD Anderson Cancer Center for the purpose of accelerating the development of ivonescimab. The company was founded in 2003 and is headquartered in Miami, Florida.

About Merck KGaA

Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company’s Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. Its Healthcare segment discovers, develops, manufacturers, and markets prescription drugs and biopharmaceuticals for the treatment of oncology, neurology and immunology, fertility, endocrinology, as well as cardiovascular, diabetes, thyroid disorders, and multiple sclerosis; general medicines; and injection device and disease monitoring software. The Electronics segment supplies materials for the semiconductor and display industries and surface design, such as delivery systems and services, as well as surface solutions, including cosmetics, effect pigments, and functional solutions. In addition, it has in-licensing agreement with Debiopharm International SA for developing and commercializing drug candidates for the treatment of head and neck cancer; Jiangsu Hengrui Pharmaceuticals Co. Ltd. for developing, manufacturing, and commercializing drug candidates for the treatment of metastatic colorectal cancer; and Abbisko Therapeutics Co. Ltd. for developing and commercializing of drug candidates for the treatment of tenosynovial giant cell tumor, as well as license and collaboration agreement with Merck KGaA to discover two targeted protein degraders against critical oncogenic proteins. The company was founded in 1668 and is headquartered in Darmstadt, Germany. Merck KGaA operates as a subsidiary of E. Merck KGaA.