Critical Review: Eli Lilly and Company (NYSE:LLY) & ESSA Pharma (NASDAQ:EPIX)

Eli Lilly and Company (NYSE:LLY) and ESSA Pharma (NASDAQ:EPIX) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Eli Lilly and Company and ESSA Pharma, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eli Lilly and Company	0	3	16	0	2.84
ESSA Pharma	0	0	2	0	3.00

Eli Lilly and Company currently has a consensus price target of $728.05, indicating a potential downside of 3.08%. ESSA Pharma has a consensus price target of $16.50, indicating a potential upside of 126.03%. Given ESSA Pharma’s stronger consensus rating and higher possible upside, analysts clearly believe ESSA Pharma is more favorable than Eli Lilly and Company.

Profitability

This table compares Eli Lilly and Company and ESSA Pharma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eli Lilly and Company	15.36%	51.22%	9.94%
ESSA Pharma	N/A	-17.41%	-17.04%

Earnings & Valuation

This table compares Eli Lilly and Company and ESSA Pharma’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eli Lilly and Company	$34.12 billion	20.92	$5.24 billion	$5.80	129.52
ESSA Pharma	N/A	N/A	-$26.58 million	($0.59)	-12.37

Eli Lilly and Company has higher revenue and earnings than ESSA Pharma. ESSA Pharma is trading at a lower price-to-earnings ratio than Eli Lilly and Company, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Eli Lilly and Company has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, ESSA Pharma has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500.

Insider & Institutional Ownership

82.5% of Eli Lilly and Company shares are owned by institutional investors. Comparatively, 75.1% of ESSA Pharma shares are owned by institutional investors. 0.1% of Eli Lilly and Company shares are owned by company insiders. Comparatively, 14.7% of ESSA Pharma shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Eli Lilly and Company beats ESSA Pharma on 9 of the 13 factors compared between the two stocks.

About Eli Lilly and Company

Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. The company offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity. It also provides oncology products, including Alimta, Cyramza, Erbitux, Jaypirca, Retevmo, Tyvyt, and Verzenio. In addition, the company offers Olumiant for rheumatoid arthritis, atopic dermatitis, severe alopecia areata, and COVID-19; Taltz for plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondylarthritis; Omvoh for ulcerative colitis; Cymbalta for depressive disorder, diabetic peripheral neuropathic pain, generalized anxiety disorder, fibromyalgia, and chronic musculoskeletal pain; Ebglyss for severe atopic dermatitis; and Emgality for migraine prevention and episodic cluster headache. Further, it provides Cialis for erectile dysfunction and benign prostatic hyperplasia; and Forteo for osteoporosis. It has collaborations with Incyte Corporation; Boehringer Ingelheim Pharmaceuticals, Inc.; F. Hoffmann-La Roche Ltd and Genentech, Inc.; Biologics, Inc., AbCellera Biologics Inc.; and Chugai Pharmaceutical Co., Ltd. The company was founded in 1876 and is headquartered in Indianapolis, Indiana.

About ESSA Pharma

ESSA Pharma Inc., a clinical stage pharmaceutical company, focuses the development of small molecule drugs for the treatment of prostate cancer. The company's lead candidate EPI-7386, an androgen receptor based resistance mechanisms that develop in patients with castration-resistant prostate cancer and metastatic castration-resistant prostate cancer. It has collaboration agreements with Bayer Consumer Care AG; Janssen Research & Development, LLC; and Astellas Pharma Inc. ESSA Pharma Inc. was incorporated in 2009 and is headquartered in Vancouver, Canada.