Contrasting Neurocrine Biosciences (NASDAQ:NBIX) and Alector (NASDAQ:ALEC)

Alector (NASDAQ:ALEC) and Neurocrine Biosciences (NASDAQ:NBIX) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Institutional and Insider Ownership

85.8% of Alector shares are owned by institutional investors. Comparatively, 92.6% of Neurocrine Biosciences shares are owned by institutional investors. 9.1% of Alector shares are owned by company insiders. Comparatively, 4.3% of Neurocrine Biosciences shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Alector and Neurocrine Biosciences”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alector	$100.56 million	1.43	-$130.39 million	($1.23)	-1.18
Neurocrine Biosciences	$2.36 billion	4.79	$341.30 million	$3.29	34.38

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

Volatility & Risk

Alector has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, Neurocrine Biosciences has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Profitability

This table compares Alector and Neurocrine Biosciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alector	-257.54%	-108.77%	-27.03%
Neurocrine Biosciences	14.49%	13.38%	9.73%

Analyst Recommendations

This is a breakdown of current ratings for Alector and Neurocrine Biosciences, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alector	2	2	3	0	2.14
Neurocrine Biosciences	0	5	17	1	2.83

Alector presently has a consensus target price of $3.75, indicating a potential upside of 157.73%. Neurocrine Biosciences has a consensus target price of $166.90, indicating a potential upside of 47.56%. Given Alector’s higher probable upside, equities research analysts plainly believe Alector is more favorable than Neurocrine Biosciences.

Summary

Neurocrine Biosciences beats Alector on 12 of the 15 factors compared between the two stocks.

About Alector

Alector, Inc., a clinical stage biopharmaceutical company, develops therapies for the treatment of neurodegeneration diseases. Its products include AL001, an immune activity in the brain with genetic links to multiple neurodegenerative disorders, which is in Phase III clinical trial for the treatment of frontotemporal dementia, Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis diseases; and AL101 that is in Phase I clinical trial for the treatment of neurodegenerative diseases, including Alzheimer's and Parkinson's diseases. The company also offers AL002, a product candidate that is in Phase II clinical trial for the treatment of Alzheimer's disease. Alector, Inc. has a collaboration agreement with Adimab, LLC for the research and development of antibodies; and a strategic collaboration agreement with GlaxoSmithKline plc for the development and commercialization of monoclonal antibodies, such as AL001 and AL101 to treat neurodegenerative diseases. The company was founded in 2013 and is headquartered in South San Francisco, California.

About Neurocrine Biosciences

Neurocrine Biosciences, Inc. discovers, develops, and markets pharmaceuticals for neurological, neuroendocrine, and neuropsychiatric disorders in the United States and internationally. The company’s products include INGREZZA for tardive dyskinesia and chorea associated with Huntington’s disease; ALKINDI for adrenal insufficiency; Efmody capsules for classic congenital adrenal hyperplasia; Orilissa tablets for endometriosis; and Oriahnn capsules to treat uterine fibroids. Its product candidates in clinical development include valbenazine to treat dyskinetic cerebral palsy in pediatrics and adults; NBI-921352 to treat developmental and epileptic encephalopathy syndrome in pediatrics and adults; NBI-827104 to treat epileptic encephalopathy with continuous spike-and-wave during sleep; NBI-1076986 to treat movement disorders; crinecerfront to treat congenital adrenal hyperplasia in adults and children; EFMODY to treat congenital adrenal hyperplasia and adrenal insufficiency in adults; valbenazine for the adjunctive treatment of schizophrenia; NBI-1065845 for the treatment of inadequate response to treatment in major depressive disorder; luvadaxistat to treat cognitive impairment related to schizophrenia; NBI-1117568 for the treatment of schizophrenia; NBI-1070770 to treat major depressive disorder; NBI-1117570 for the treatment of symptoms of psychosis and cognition in neurological and neuropsychiatric conditions; and NBI-1117569, NBI-1117567, and NBI-1065890 to treat CNS indications. The company also has license and collaboration agreements with Heptares Therapeutics Limited; Takeda Pharmaceutical Company Limited; Idorsia Pharmaceuticals Ltd; Xenon Pharmaceuticals Inc.; Voyager Therapeutics, Inc.; BIAL Portela & Ca, S.A.; Mitsubishi Tanabe Pharma Corporation; and AbbVie Inc. The company was incorporated in 1992 and is headquartered in San Diego, California.