Critical Analysis: GH Research (NASDAQ:GHRS) and ORIC Pharmaceuticals (NASDAQ:ORIC)

ORIC Pharmaceuticals (NASDAQ:ORIC) and GH Research (NASDAQ:GHRS) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Volatility and Risk

ORIC Pharmaceuticals has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, GH Research has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares ORIC Pharmaceuticals and GH Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ORIC Pharmaceuticals	N/A	-42.71%	-38.55%
GH Research	N/A	-15.48%	-15.01%

Earnings and Valuation

This table compares ORIC Pharmaceuticals and GH Research’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ORIC Pharmaceuticals	N/A	N/A	-$100.70 million	($1.96)	-4.47
GH Research	N/A	N/A	-$35.59 million	($0.68)	-16.62

GH Research is trading at a lower price-to-earnings ratio than ORIC Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for ORIC Pharmaceuticals and GH Research, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ORIC Pharmaceuticals	0	0	5	0	3.00
GH Research	0	0	2	0	3.00

ORIC Pharmaceuticals currently has a consensus target price of $19.80, suggesting a potential upside of 125.77%. GH Research has a consensus target price of $39.50, suggesting a potential upside of 249.56%. Given GH Research’s higher probable upside, analysts plainly believe GH Research is more favorable than ORIC Pharmaceuticals.

Institutional and Insider Ownership

95.1% of ORIC Pharmaceuticals shares are owned by institutional investors. Comparatively, 56.9% of GH Research shares are owned by institutional investors. 5.3% of ORIC Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

About ORIC Pharmaceuticals

ORIC Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, engages in the discovery and development of therapies for treatment of cancers in the United States. Its clinical stage product candidates include ORIC-114, a brain penetrant orally bioavailable irreversible inhibitor, currently under Phase 1b study, which is designed to selectively target epidermal growth factor receptor and human epidermal growth factor receptor 2 with high potency towards exon 20 insertion mutations; ORIC-944, an allosteric inhibitor of the polycomb repressive complex 2 for prostate cancer, currently under Phase 1b study; and ORIC-533, an orally bioavailable small molecule inhibitor of CD73, currently under Phase 1b study, being developed for resistance to chemotherapy- and immunotherapy-based treatment regimens. The company is also developing multiple discovery stage precision medicines targeting other cancer resistance mechanisms, including ORIC-613, an orally bioavailable, highly selective inhibitor of PLK4, in preclinical studies for the treatment of breast cancers. It has a license and collaboration agreement with Voronoi Inc.; a license agreement with Mirati Therapeutics, Inc.; and clinical development collaboration agreement with Pfizer Inc. The company was incorporated in 2014 and is headquartered in South San Francisco, California.

About GH Research

GH Research PLC, a clinical-stage biopharmaceutical company, engages in developing various therapies to treat psychiatric and neurological disorders. The company develops 5-Methoxy-N,N-Dimethyltryptamine (5-MeO-DMT) therapies for the treatment of patients with treatment-resistant depression (TRD). Its lead program is GH001, an inhalable mebufotenin product candidate that has completed two Phase 1 clinical trials and Phase 1/2 clinical trial in patients with TRD. The company also develops GH002, an intravenous mebufotenin product candidate; and GH003, an intranasal mebufotenin product candidate, which are in preclinical development trials with a focus on psychiatric and neurological disorders. GH Research PLC was incorporated in 2018 and is based in Dublin, Ireland.