Veracyte (NASDAQ:VCYT) and DermTech (NASDAQ:DMTK) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Risk & Volatility
Veracyte has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, DermTech has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.
This table compares Veracyte and DermTech’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and recommmendations for Veracyte and DermTech, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Veracyte presently has a consensus price target of $34.50, suggesting a potential upside of 14.43%. DermTech has a consensus price target of $15.00, suggesting a potential upside of 31.46%. Given DermTech’s higher possible upside, analysts clearly believe DermTech is more favorable than Veracyte.
Earnings and Valuation
This table compares Veracyte and DermTech’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Veracyte||$92.01 million||16.00||-$23.00 million||($0.62)||-48.63|
DermTech has lower revenue, but higher earnings than Veracyte.
Institutional & Insider Ownership
33.4% of DermTech shares are owned by institutional investors. 8.3% of Veracyte shares are owned by insiders. Comparatively, 21.0% of DermTech shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Veracyte, Inc. operates as a genomic diagnostics company in the United States and internationally. The company offers Afirma Genomic Sequencing Classifier and Xpression Atlas solutions for a complex landscape in thyroid nodule diagnosis to physicians; Percepta Bronchial Genomic Classifier solution for use in lung cancer diagnosis; and Envisia Genomic Classifier solution for the diagnosis of idiopathic pulmonary fibrosis. It sells its products through product specialists, account managers, and medical science specialists. Veracyte, Inc. has a strategic collaboration with Johnson & Johnson, LLC and Johnson & Johnson's Lung Cancer Initiative to advance diagnostics of a nasal swab test for early lung cancer detection; a research collaboration with Loxo Oncology for the development of therapies for patients with genetically defined cancers; and an agreement with Johnson & Johnson Services, Inc. for the development and commercialization of novel diagnostic tests to detect lung cancer. The company was formerly known as Calderome, Inc. and changed its name to Veracyte, Inc. in March 2008. Veracyte, Inc. was incorporated in 2006 and is headquartered in South San Francisco, California.
DermTech, Inc., a molecular genomics company, develops and markets novel non-invasive diagnostic tests to diagnosis skin cancer and related conditions in the United States. The company offers Pigmented Lesion Assay (PLA), a gene expression test that helps rule out melanoma and the need for a surgical biopsy of atypical pigmented lesions. It also provides Nevome test, an adjunctive reflex test for the PLA; and adhesive skin sample collection kits, as well as gene expression assays for the Th1, Th2, IFN-gamma, and Th17 inflammatory pathways. The company sells its products to pathology and oncology practitioners. DermTech, Inc. was incorporated in 1995 and is headquartered in La Jolla, California.
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