Financial Analysis: Denali Therapeutics (NASDAQ:DNLI) vs. Humacyte (NASDAQ:HUMA)

Denali Therapeutics (NASDAQ:DNLI) and Humacyte (NASDAQ:HUMA) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Denali Therapeutics and Humacyte, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denali Therapeutics	1	2	13	0	2.75
Humacyte	1	0	7	0	2.75

Denali Therapeutics presently has a consensus target price of $35.92, suggesting a potential upside of 44.13%. Humacyte has a consensus target price of $6.11, suggesting a potential upside of 850.97%. Given Humacyte’s higher possible upside, analysts plainly believe Humacyte is more favorable than Denali Therapeutics.

Valuation and Earnings

This table compares Denali Therapeutics and Humacyte”s top-line 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	12.05	-$512.54 million	($2.84)	-8.77
Humacyte	$2.04 million	84.88	-$40.83 million	($0.49)	-1.31

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

Volatility and Risk

Denali Therapeutics has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Humacyte has a beta of 2.53, suggesting that its share price is 153% more volatile than the S&P 500.

Profitability

This table compares Denali Therapeutics and Humacyte’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denali Therapeutics	N/A	-55.27%	-44.24%
Humacyte	-4,556.29%	-983.32%	-88.84%

Institutional & Insider Ownership

92.9% of Denali Therapeutics shares are held by institutional investors. Comparatively, 44.7% of Humacyte shares are held by institutional investors. 9.7% of Denali Therapeutics shares are held by company insiders. Comparatively, 3.1% of Humacyte shares are held by company 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 Humacyte on 7 of the 13 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 Humacyte

Humacyte, Inc. engages in the development and manufacture of off-the-shelf, implantable, and bioengineered human tissues for the treatment of diseases and conditions across a range of anatomic locations in multiple therapeutic areas. The company using its proprietary and scientific technology platform to engineer and manufacture human acellular vessels (HAVs) to be implanted into patient without inducing a foreign body response or leading to immune rejection. It is developing a portfolio of HAVs, which would target the vascular repair, reconstruction, and replacement market, including vascular trauma; arteriovenous access for hemodialysis; peripheral arterial disease; pediatric heart surgery; and coronary artery bypass grafting, as well as for the delivery of cellular therapy, including pancreatic islet cell transplantation to treat Type 1 diabetes. The company was founded in 2004 and is headquartered in Durham, North Carolina.