Vericel (NASDAQ:VCEL – Get Free Report) and Zymeworks (NASDAQ:ZYME – Get Free Report) are both mid-cap healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.
Risk and Volatility
Vericel has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Zymeworks has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.
Earnings and Valuation
This table compares Vericel and Zymeworks”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Vericel | $276.26 million | 7.62 | $16.52 million | $0.47 | 87.43 |
| Zymeworks | $105.96 million | 20.04 | -$81.13 million | ($2.02) | -14.92 |
Vericel has higher revenue and earnings than Zymeworks. Zymeworks is trading at a lower price-to-earnings ratio than Vericel, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
92.9% of Zymeworks shares are owned by institutional investors. 7.6% of Vericel shares are owned by insiders. Comparatively, 37.7% of Zymeworks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent recommendations for Vericel and Zymeworks, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vericel | 0 | 2 | 4 | 0 | 2.67 |
| Zymeworks | 1 | 1 | 12 | 0 | 2.79 |
Vericel presently has a consensus target price of $57.20, suggesting a potential upside of 39.21%. Zymeworks has a consensus target price of $41.67, suggesting a potential upside of 38.29%. Given Vericel’s higher probable upside, equities analysts clearly believe Vericel is more favorable than Zymeworks.
Profitability
This table compares Vericel and Zymeworks’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Vericel | 7.91% | 6.91% | 5.02% |
| Zymeworks | -405.31% | -72.30% | -37.18% |
Summary
Vericel beats Zymeworks on 8 of the 14 factors compared between the two stocks.
About Vericel
Vericel Corporation, a commercial-stage biopharmaceutical company, engages in the research, development, manufacture, and distribution of cellular therapies for sports medicine and severe burn care markets in North America. The company markets autologous cell therapy products comprising MACI, an autologous cultured chondrocytes on porcine collagen membrane for the repair of symptomatic, and single or multiple full-thickness cartilage defects of the knee; Epicel, a permanent skin replacement humanitarian use device for the treatment of adult and pediatric patients with deep-dermal or full-thickness burns; and NexoBrid, a biological orphan product for eschar removal in adults with deep partial-thickness and/or full-thickness thermal burns. The company was formerly known as Aastrom Biosciences, Inc. Vericel Corporation was incorporated in 1989 and is headquartered in Cambridge, Massachusetts.
About Zymeworks
Zymeworks Inc., a clinical-stage biopharmaceutical company, discovers, develops, and commercializes biotherapeutics for the treatment of cancer. The company’s lead product candidates include zanidatamab, a novel bispecific antibody that is in Phase 1 and Phase 2 clinical trials for the treatment of biliary tract, gastroesophageal adenocarcinomas, and breast cancer; and ZW49, a biparatopic anti- human epidermal growth factor receptor 2 (HER2) antibody-drug conjugate that is in Phase 1 clinical trial for the treatment of advanced or metastatic HER2-expressing tumors. The company has strategic partnerships with Merck Sharp & Dohme Research Ltd.; Eli Lilly and Company; Bristol-Myers Squibb company; GlaxoSmithKline Intellectual Property Development Ltd.; Daiichi Sankyo Co., Ltd.; Janssen Biotech, Inc.; and BeiGene, Ltd. It also has licensing and research collaboration with LEO Pharma A/S to discover and develop bispecific antibodies; and Iconic Therapeutics, Inc. Zymeworks Inc. was founded in 2003 and is headquartered in Vancouver, Canada.
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