Recursion Pharmaceuticals (NASDAQ:RXRX – Get Free Report) and Denali Therapeutics (NASDAQ:DNLI – Get Free Report) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.
Volatility and Risk
Recursion Pharmaceuticals has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, Denali Therapeutics has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.
Valuation and Earnings
This table compares Recursion Pharmaceuticals and Denali Therapeutics’ gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Recursion Pharmaceuticals | $44.58 million | 41.95 | -$328.07 million | ($1.55) | -5.14 |
| Denali Therapeutics | $330.53 million | 6.76 | -$145.22 million | ($1.08) | -14.51 |
Analyst Recommendations
This is a summary of current ratings for Recursion Pharmaceuticals and Denali Therapeutics, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Recursion Pharmaceuticals | 0 | 3 | 2 | 0 | 2.40 |
| Denali Therapeutics | 0 | 0 | 8 | 0 | 3.00 |
Recursion Pharmaceuticals currently has a consensus price target of $12.75, suggesting a potential upside of 59.38%. Denali Therapeutics has a consensus price target of $41.22, suggesting a potential upside of 162.90%. Given Denali Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Denali Therapeutics is more favorable than Recursion Pharmaceuticals.
Profitability
This table compares Recursion Pharmaceuticals and Denali Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Recursion Pharmaceuticals | -735.99% | -72.88% | -50.89% |
| Denali Therapeutics | -36.51% | -13.50% | -11.38% |
Insider & Institutional Ownership
89.1% of Recursion Pharmaceuticals shares are held by institutional investors. Comparatively, 92.9% of Denali Therapeutics shares are held by institutional investors. 20.0% of Recursion Pharmaceuticals shares are held by insiders. Comparatively, 7.9% of Denali Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
Denali Therapeutics beats Recursion Pharmaceuticals on 11 of the 13 factors compared between the two stocks.
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.
About Denali Therapeutics
Denali Therapeutics Inc., a biopharmaceutical company, develops a portfolio of product candidates engineered to cross the blood-brain barrier for neurodegenerative diseases and lysosomal storage diseases in the United States. The company's transport vehicle (TV)-enabled programs include DNL310 ETV, an IDS enzyme replacement therapy program for MPS II; TAK-594/DNL593 which is in Phase 1/II for frontotemporal dementia-granulin; DNL126 program for MPS IIIA; and DNL622 for MPS I, as well as other preclinical programs that target amyloid beta and HER2. Its brain-penetrant small molecule programs comprise BIIB122/DNL151 LRRK2 inhibitor program for Parkinson's disease; SAR443820/DNL788 RIPK1 inhibitor program for CNS disease; DNL343 eIF2B Activator program for amyotrophic lateral sclerosis; and SAR443122/DNL758 RIPK1 inhibitor program for peripheral inflammatory diseases. It also provides early stage program include TAK-594/DNL593 program for FTD-GRN; DNL126 program for MPS IIIA, a Sanfilippo Syndrome A; DNL622 for MPS I which is Hurler syndrome; Antibody Transport Vehicle Amyloid beta program; Oligonucleotide Transport Vehicle platform, a novel class of biotherapeutics to address the root cause of diseases through modulation of gene expression; and other TV-enabled discovery programs. The company has collaboration agreements with Biogen MA Inc. and Biogen International GmbH; Genzyme Corporation; Takeda Pharmaceutical Company Limited; F-star Gamma Limited, F-star Biotechnologische Forschungs-und Entwicklungsges m.b.H, and F-star Biotechnology Limited; and Genentech, Inc. The company was formerly known as SPR Pharma Inc. and changed its name to Denali Therapeutics Inc. in March 2015. Denali Therapeutics Inc. was incorporated in 2013 and is headquartered in South San Francisco, California.
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