Analyzing Heron Therapeutics (NASDAQ:HRTX) and Journey Medical (NASDAQ:DERM)

Journey Medical (NASDAQ:DERM) and Heron Therapeutics (NASDAQ:HRTX) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Valuation & Earnings

This table compares Journey Medical and Heron Therapeutics”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Journey Medical	$61.86 million	3.59	-$11.43 million	($0.22)	-35.73
Heron Therapeutics	$154.90 million	0.42	-$20.19 million	($0.19)	-1.81

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

Institutional & Insider Ownership

7.2% of Journey Medical shares are held by institutional investors. Comparatively, 80.0% of Heron Therapeutics shares are held by institutional investors. 14.5% of Journey Medical shares are held by insiders. Comparatively, 6.1% of Heron Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Journey Medical and Heron Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Journey Medical	-8.95%	-20.23%	-6.60%
Heron Therapeutics	-22.52%	-293.02%	-10.00%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Journey Medical and Heron Therapeutics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Journey Medical	1	1	2	0	2.25
Heron Therapeutics	1	3	1	0	2.00

Journey Medical presently has a consensus price target of $14.00, suggesting a potential upside of 78.12%. Heron Therapeutics has a consensus price target of $2.00, suggesting a potential upside of 481.56%. Given Heron Therapeutics’ higher possible upside, analysts plainly believe Heron Therapeutics is more favorable than Journey Medical.

Risk & Volatility

Journey Medical has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Heron Therapeutics has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.

Summary

Journey Medical beats Heron Therapeutics on 8 of the 14 factors compared between the two stocks.

About Journey Medical

Journey Medical Corporation focuses on the development and commercialization of pharmaceutical products for the treatment of dermatological conditions in the United States. The company's marketed products include Qbrexza, a medicated cloth towelette for the treatment of primary axillary hyperhidrosis; Accutane, an oral isotretinoin drug to treat severe recalcitrant nodular acne; and Amzeeq, a topical formulation of minocycline for the treatment of inflammatory lesions of non-nodular moderate to severe acne vulgaris. It also offers Zilxi, a topical minocycline treatment for inflammatory lesions of rosacea; Exelderm cream and solution an antifungal intended for topical use; Targadox, an oral doxycycline drug for adjunctive therapy for severe acne; and Luxamend, a water-based emulsion formulated to provide a moist healing environment for superficial wounds; minor cuts or scrapes; dermal ulcers; donor sites; first- and second-degree burns, including sunburns; and radiation dermatitis. In addition, the company sells sulconazole nitrate cream and solution indicated for the treatment of tinea cruris, tinea corporis, and tinea versicolor; and doxycycline hyclate tablets, as an adjunctive therapy for severe acne. The company was formerly known as Coronado Dermatology, Inc. and changed its name to Journey Medical Corporation. Journey Medical Corporation was incorporated in 2014 and is headquartered in Scottsdale, Arizona. Journey Medical Corporation is a subsidiary of Fortress Biotech, Inc.

About Heron Therapeutics

Heron Therapeutics, Inc., a commercial-stage biotechnology company, focuses on enhancing the lives of patients by developing and commercializing therapeutic that enhances medical care. The company's product candidates utilize its proprietary Biochronomer, a drug delivery technology, which delivers therapeutic levels of a range of short-acting pharmacological agents over a period from days to weeks with a single administration. It offers SUSTOL (granisetron), an extended-release injection for the prevention of acute and delayed nausea and vomiting associated with moderately emetogenic chemotherapy, or anthracycline and cyclophosphamide combination chemotherapy regimens; and CINVANTI, an intravenous formulation of aprepitant, a substance P/neurokinin-1 receptor antagonist for the prevention of acute and delayed nausea and vomiting associated with highly emetogenic cancer chemotherapy, as well as nausea and vomiting associated with moderately emetogenic cancer chemotherapy. The company is also developing ZYNRELEF, a dual-acting local anesthetic that delivers a fixed-dose combination of the local anesthetic bupivacaine and a low dose of the nonsteroidal anti-inflammatory drug meloxicam; and APONVIE, an intravenous formulation of a substance P/neurokinin-1 receptor antagonist indicated for the prevention of postoperative nausea and vomiting in adults. The company was formerly known as A.P. Pharma, Inc. and changed its name to Heron Therapeutics, Inc. in January 2014. Heron Therapeutics, Inc. was founded in 1983 and is headquartered in San Diego, California.