Zai Lab (NASDAQ:ZLAB) and Adial Pharmaceuticals (NASDAQ:ADIL) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.
Institutional and Insider Ownership
63.8% of Zai Lab shares are owned by institutional investors. Comparatively, 5.9% of Adial Pharmaceuticals shares are owned by institutional investors. 40.8% of Adial Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Zai Lab and Adial Pharmaceuticals, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zai Lab | 0 | 0 | 6 | 0 | 3.00 |
| Adial Pharmaceuticals | 0 | 0 | 2 | 0 | 3.00 |
Zai Lab presently has a consensus price target of $49.25, indicating a potential downside of 8.99%. Adial Pharmaceuticals has a consensus price target of $5.00, indicating a potential upside of 148.76%. Given Adial Pharmaceuticals’ higher probable upside, analysts plainly believe Adial Pharmaceuticals is more favorable than Zai Lab.
Profitability
This table compares Zai Lab and Adial Pharmaceuticals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Zai Lab | N/A | N/A | N/A |
| Adial Pharmaceuticals | N/A | -89.25% | -84.46% |
Valuation & Earnings
This table compares Zai Lab and Adial Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zai Lab | $130,000.00 | 24,185.09 | -$139.07 million | ($2.64) | -20.50 |
| Adial Pharmaceuticals | N/A | N/A | -$11.63 million | N/A | N/A |
Adial Pharmaceuticals has lower revenue, but higher earnings than Zai Lab.
Volatility & Risk
Zai Lab has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Adial Pharmaceuticals has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.
Summary
Zai Lab beats Adial Pharmaceuticals on 6 of the 9 factors compared between the two stocks.
About Zai Lab
Zai Lab Limited, a biopharmaceutical company, engages in discovering or licensing, developing, and commercializing proprietary therapeutics that address medical needs in the fields of oncology, and autoimmune and infectious disease therapies in the People’s Republic of China. Its drug candidates include ZL-2306, a poly ADP ribose polymerase 1/2 inhibitor, which is in Phase III clinical trial for the treatment of ovarian, lung, and breast cancers; ZL-2401, an antibiotic that is in Phase III clinical trial to treat ABSSSI, CABP, and UTI; FPA144, a humanized monoclonal antibody, which is in Phase I/III clinical trial to treat gastric and gastroesophageal cancer; ETX2514, a novel ß-lactamase inhibitor that is in Phase II cUTI trial for the treatment of acinetobacter baumannii; and ZL-2301, which is in Phase III clinical trial to treat HCC. The company’s drug candidates also comprise ZL-3101, a novel steroid-sparing topical product that is in Phase II clinical trial for the treatment of eczema and psoriasis; and ZL-2302 to treat non-small cell lung cancer. The company, through its subsidiary, Zai Lab (Shanghai) Co. Ltd., has a collaboration agreement with the NovoCure Limited to perform clinical studies, sell, and import tumor treating field products in the field of oncology. Zai Lab Limited was founded in 2013 and is headquartered in Shanghai, the People’s Republic of China.
About Adial Pharmaceuticals
Adial Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, focuses on the development of therapeutic agents for the treatment of alcohol use disorders. Its lead product is AD04, a selective serotonin-3 antagonist that has completed Phase IIb clinical trials for the treatment of nausea and emesis. The company was founded in 2010 and is based in Charlottesville, Virginia.
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