Financial Analysis: Alvotech (NASDAQ:ALVO) & Mesoblast (NASDAQ:MESO)

Alvotech (NASDAQ:ALVO) and Mesoblast (NASDAQ:MESO) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Alvotech and Mesoblast, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alvotech	0	0	1	0	3.00
Mesoblast	0	0	4	0	3.00

Alvotech currently has a consensus target price of $18.00, suggesting a potential upside of 45.16%. Mesoblast has a consensus target price of $11.50, suggesting a potential upside of 21.89%. Given Alvotech’s higher possible upside, equities analysts plainly believe Alvotech is more favorable than Mesoblast.

Profitability

This table compares Alvotech and Mesoblast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alvotech	-227.06%	N/A	-61.26%
Mesoblast	N/A	N/A	N/A

Risk and Volatility

Alvotech has a beta of -0.08, indicating that its stock price is 108% less volatile than the S&P 500. Comparatively, Mesoblast has a beta of 3.47, indicating that its stock price is 247% more volatile than the S&P 500.

Valuation & Earnings

This table compares Alvotech and Mesoblast”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alvotech	$306.77 million	1.26	-$551.73 million	($2.08)	-5.96
Mesoblast	$5.90 million	182.53	-$87.96 million	($1.12)	-8.42

Mesoblast has lower revenue, but higher earnings than Alvotech. Mesoblast is trading at a lower price-to-earnings ratio than Alvotech, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

1.4% of Mesoblast shares are owned by institutional investors. 0.5% of Alvotech shares are owned by company insiders. Comparatively, 18.8% of Mesoblast shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Mesoblast beats Alvotech on 9 of the 12 factors compared between the two stocks.

About Alvotech

Alvotech, through its subsidiaries, develops and manufactures biosimilar medicines for patients worldwide. It offers biosimilar products in the therapeutic areas of autoimmune, eye, and bone disorders, as well as cancer. The company's lead program is AVT02, a high concentration formulation biosimilar to Humira to treat various inflammatory conditions, including rheumatoid arthritis, psoriatic arthritis, Crohn's disease, ulcerative colitis, plaque psoriasis, and other indications; AVT04, a biosimilar to Stelara to treat various inflammatory conditions comprising psoriatic arthritis, Crohn's disease, ulcerative colitis, plaque psoriasis, and other indications; AVT06, a biosimilar to Eylea to treat various conditions, such as age-related macular degeneration, macular edema, and diabetic retinopathy; and AVT03, a biosimilar to Xgeva and Prolia, which is in the pre-clinical phase to treat prevent bone fracture, spinal cord compression, and the need for radiation or bone surgery in patients with certain types of cancer, as well as prevent bone loss and increase bone mass. In addition, it offers AVT05, a biosimilar to Simponi and Simponi Aria, which is in early phase development to treat various inflammatory conditions, including rheumatoid arthritis, psoriatic arthritis, ulcerative colitis, and other indications; AVT16, a biosimilar to an Entyvio product; AVT23, a biosimilar to Xolair, which is in late-stage development to treat nasal polyps; and AVT33, a biosimilar to an Keytruda product. Alvotech was founded in 2013 and is based in Luxembourg, Luxembourg.

About Mesoblast

Mesoblast Limited engages in the development of regenerative medicine products in Australia, the United States, Singapore, and Switzerland. The company offers products in the areas of cardiovascular, spine orthopedic disorder, oncology, hematology, and immune-mediated and inflammatory diseases. Its proprietary regenerative medicine technology platform is based on specialized cells known as mesenchymal lineage cells. The company offers Remestemcel-L that is in Phase III clinical trials for the treatment of systemic inflammatory diseases, including steroid refractory acute graft versus host disease, acute respiratory distress syndrome, and biologic refractory inflammatory bowel disease; and Remestemcel-L, which is in Phase III clinical trials to treat chronic heart failure and chronic low back pain due to degenerative disc disease. It is also developing MPC-300-IV to treat biologic refractory rheumatoid arthritis diabetic nephropathy; and MPC-25-IC for the treatment or prevention of acute myocardial infarction. It has strategic partnerships with Tasly Pharmaceutical Group to offer MPC-150-IM for heart failure and MPC-25-IC for heart attacks in China; JCR Pharmaceuticals Co. Ltd. to treat wound healing in patients with epidermolysis bullosa; and Grünenthal to develops and commercializes cell therapy for the treatment of chronic low back pain. The company was incorporated in 2004 and is headquartered in Melbourne, Australia.