Analyzing Labcorp (NYSE:LH) & Compass Pathways (NASDAQ:CMPS)

Labcorp (NYSE:LH) and Compass Pathways (NASDAQ:CMPS) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Volatility & Risk

Labcorp has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Compass Pathways has a beta of 2.47, suggesting that its share price is 147% more volatile than the S&P 500.

Insider and Institutional Ownership

95.9% of Labcorp shares are held by institutional investors. Comparatively, 46.2% of Compass Pathways shares are held by institutional investors. 0.8% of Labcorp shares are held by company insiders. Comparatively, 2.8% of Compass Pathways shares are held 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Labcorp and Compass Pathways, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Labcorp	0	2	8	0	2.80
Compass Pathways	1	0	14	1	2.94

Labcorp currently has a consensus price target of $315.33, suggesting a potential upside of 6.28%. Compass Pathways has a consensus price target of $24.15, suggesting a potential upside of 114.51%. Given Compass Pathways’ stronger consensus rating and higher possible upside, analysts clearly believe Compass Pathways is more favorable than Labcorp.

Profitability

This table compares Labcorp and Compass Pathways’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Labcorp	6.66%	16.29%	7.62%
Compass Pathways	N/A	-31.07%	-11.40%

Valuation and Earnings

This table compares Labcorp and Compass Pathways”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Labcorp	$13.95 billion	1.74	$876.50 million	$11.29	26.28
Compass Pathways	N/A	N/A	-$287.86 million	($3.15)	-3.57

Labcorp has higher revenue and earnings than Compass Pathways. Compass Pathways is trading at a lower price-to-earnings ratio than Labcorp, indicating that it is currently the more affordable of the two stocks.

Summary

Labcorp beats Compass Pathways on 8 of the 14 factors compared between the two stocks.

About Labcorp

Labcorp Holdings, Inc. engages in providing medical testing services. The company was founded on April 16, 2024 and is headquartered in Burlington, NC.

About Compass Pathways

Compass Pathways plc operates as a mental health care company in the United Kingdom and the United States. It develops COMP360, a psilocybin therapy that is in Phase III clinical trials for the treatment of treatment-resistant depression; and is in Phase II clinical trials for the treatment of post-traumatic stress disorder and anorexia nervosa. The company was formerly known as COMPASS Rx Limited and changed its name to Compass Pathways plc in August 2020. Compass Pathways plc was incorporated in 2020 and is headquartered in London, the United Kingdom.