Contrasting Denali Therapeutics (NASDAQ:DNLI) and Recursion Pharmaceuticals (NASDAQ:RXRX)

Denali Therapeutics (NASDAQ:DNLI) and Recursion Pharmaceuticals (NASDAQ:RXRX) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.

Valuation & Earnings

This table compares Denali Therapeutics and Recursion Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denali Therapeutics	$330.53 million	6.65	-$145.22 million	($1.08)	-14.29
Recursion Pharmaceuticals	$44.58 million	42.74	-$328.07 million	($1.55)	-5.24

Denali Therapeutics has higher revenue and earnings than Recursion Pharmaceuticals. Denali Therapeutics is trading at a lower price-to-earnings ratio than Recursion Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

92.9% of Denali Therapeutics shares are owned by institutional investors. Comparatively, 89.1% of Recursion Pharmaceuticals shares are owned by institutional investors. 7.9% of Denali Therapeutics shares are owned by company insiders. Comparatively, 20.0% of Recursion Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Denali Therapeutics and Recursion Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denali Therapeutics	0	0	8	0	3.00
Recursion Pharmaceuticals	0	3	2	0	2.40

Denali Therapeutics presently has a consensus target price of $41.22, indicating a potential upside of 167.16%. Recursion Pharmaceuticals has a consensus target price of $12.75, indicating a potential upside of 57.02%. Given Denali Therapeutics’ stronger consensus rating and higher probable upside, equities analysts plainly believe Denali Therapeutics is more favorable than Recursion Pharmaceuticals.

Volatility and Risk

Denali Therapeutics has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Recursion Pharmaceuticals has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Profitability

This table compares Denali Therapeutics and Recursion Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denali Therapeutics	-36.51%	-13.50%	-11.38%
Recursion Pharmaceuticals	-735.99%	-72.88%	-50.89%

Summary

Denali Therapeutics beats Recursion Pharmaceuticals on 11 of the 14 factors compared between the two stocks.

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.

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.