Veracyte (NASDAQ: VCYT) and InVitae Corp (NASDAQ:NVTA) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitabiliy, institutional ownership and valuation.

Insider & Institutional Ownership

63.4% of Veracyte shares are held by institutional investors. 13.4% of Veracyte shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Veracyte and InVitae Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Veracyte $71.70 million 3.90 -$20.10 million ($0.80) -10.33
InVitae Corp $31.43 million 13.62 -$95.64 million N/A N/A

Veracyte has higher revenue and earnings than InVitae Corp.

Analyst Ratings

This is a summary of recent recommendations for Veracyte and InVitae Corp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veracyte 0 0 5 0 3.00
InVitae Corp 0 0 3 0 3.00

Veracyte currently has a consensus target price of $13.00, indicating a potential upside of 57.38%. InVitae Corp has a consensus target price of $14.00, indicating a potential upside of 38.34%. Given Veracyte’s higher possible upside, equities research analysts clearly believe Veracyte is more favorable than InVitae Corp.

Profitability

This table compares Veracyte and InVitae Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veracyte -35.64% -53.58% -29.07%
InVitae Corp -260.48% -119.10% -76.26%

Summary

Veracyte beats InVitae Corp on 9 of the 10 factors compared between the two stocks.

Veracyte Company Profile

Veracyte, Inc. is a genomic diagnostics company. The Company uses genomic technology to resolve diagnostic ambiguity. It targets diseases in which patients undergo invasive diagnostic procedures. Its products combine genomic technology, clinical science and machine learning. The Company commercializes over three genomic tests, which are transforming the diagnosis of thyroid cancer, lung cancer and idiopathic pulmonary fibrosis. The Company’s commercial solution, the Afirma Thyroid fine needle aspiration (FNA) Analysis, centers on the Afirma Gene Expression Classifier (GEC). The Afirma GEC is offered directly or as part of a solution that also includes cytopathology. The Company operates in the pulmonology diagnostics market. It offers Percepta Bronchial Genomic Classifier, a genomic test to resolve ambiguity in lung cancer diagnosis. It also offers the Envisia Genomic Classifier, which is designed to help in the assessment of patients suspected to have idiopathic pulmonary fibrosis.

InVitae Corp Company Profile

Invitae Corporation utilizes an integrated portfolio of laboratory processes, software tools and informatics capabilities to process deoxyribonucleic acid (DNA)-containing samples, analyze information about patient-specific genetic variation and generate test reports for clinicians and their patients. As of December 31, 2016, the Company’s products consisted of assays totaling over 1,100 genes that could be used for multiple indications, including hereditary cancer, neurological disorders, cardiovascular disorders, pediatric disorders and other hereditary conditions. The Company offers panels for a range of hereditary conditions in cancer, cardiology, neuromuscular, pediatric and rare diseases. The Company focuses on genetic testing, genome network and genome management. The Company offers full gene sequencing and deletion/duplication analysis as a standard for all of its tests. The Company holds interests in AltaVoice, a patient-centered data company.

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