Mereo BioPharma Group (NASDAQ:MREO) & Veracyte (NASDAQ:VCYT) Head-To-Head Comparison

Mereo BioPharma Group (NASDAQ:MREO) and Veracyte (NASDAQ:VCYT) are both healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Mereo BioPharma Group and Veracyte, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mereo BioPharma Group	2	3	3	0	2.12
Veracyte	1	2	6	2	2.82

Mereo BioPharma Group currently has a consensus price target of $1.67, indicating a potential upside of 566.67%. Veracyte has a consensus price target of $54.33, indicating a potential upside of 27.75%. Given Mereo BioPharma Group’s higher possible upside, equities analysts plainly believe Mereo BioPharma Group is more favorable than Veracyte.

Valuation and Earnings

This table compares Mereo BioPharma Group and Veracyte”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mereo BioPharma Group	$500,000.00	79.84	-$41.88 million	($0.04)	-6.25
Veracyte	$517.15 million	6.61	$66.35 million	$1.41	30.16

Veracyte has higher revenue and earnings than Mereo BioPharma Group. Mereo BioPharma Group is trading at a lower price-to-earnings ratio than Veracyte, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mereo BioPharma Group and Veracyte’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mereo BioPharma Group	N/A	-74.82%	-64.28%
Veracyte	20.37%	9.26%	8.61%

Volatility and Risk

Mereo BioPharma Group has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Veracyte has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500.

Insider & Institutional Ownership

62.8% of Mereo BioPharma Group shares are owned by institutional investors. 6.5% of Mereo BioPharma Group shares are owned by company insiders. Comparatively, 1.6% of Veracyte shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Veracyte beats Mereo BioPharma Group on 11 of the 15 factors compared between the two stocks.

About Mereo BioPharma Group

Mereo BioPharma Group plc, a biopharmaceutical company, develops and commercializes therapeutics for the treatment of oncology and rare diseases in the United Kingdom, the United States, and internationally. It develops Etigilimab (MPH-313), an antibody T-cell immunoreceptor with Ig and ITIM domains, which is in Phase 1b clinical trial for the treatment of tumors. The company is also developing Navicixizumab (OMP-305B83), which has completed Phase 1b clinical trials for the treatment of the late line ovarian cancer; Acumapimod (BCT-197), a p38 MAP kinase inhibitor that is in Phase II clinical trials to treat acute exacerbations of chronic obstructive pulmonary disease; and Leflutrozole (BGS-649), an oral aromatase inhibitor for the treatment of hypogonadotropic hypogonadism which is in Phase 2 trials. In addition, it develops rare disease product candidates, including Setrusumab (BPS-804), an antibody for the treatment of osteogenesis imperfecta; and Alvelestat (MPH-966), an oral small molecule that is in Phase II clinical trial to treat Alpha-1 anti-trypsin deficiency. The company has a license agreement with Feng Biosciences for the development and commercialization of navicixizumab; license agreement with ReproNovo for the development and commercialization of leflutrozole; licensing agreement with AstraZeneca; and license agreement with Ultragenyx Pharmaceutical Inc. to develop and commercialize setrusumab. Mereo BioPharma Group plc was incorporated in 2015 and is headquartered in London, the United Kingdom.

About Veracyte

Veracyte, Inc. engages in the research, development and commercialization of diagnostic products. The firm’s portfolio includes Afirma, Percepta, and Envisia. It intends to treat thyroid cancer, improve lung cancer screening, and clarify the diagnosis of idiopathic pulmonary fibrosis. The company was founded by Bonnie H. Anderson and Y. Douglas Dolginow on August 15, 2006 and is headquartered in South San Francisco, CA.