Verastem (NASDAQ: VSTM) and Sarepta Therapeutics (NASDAQ:SRPT) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Valuation and Earnings

This table compares Verastem and Sarepta Therapeutics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Verastem N/A N/A -$36.44 million ($1.24) -2.88
Sarepta Therapeutics $5.42 million 637.48 -$267.26 million ($2.05) -26.08

Verastem has higher revenue, but lower earnings than Sarepta Therapeutics. Sarepta Therapeutics is trading at a lower price-to-earnings ratio than Verastem, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Verastem and Sarepta Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verastem 0 1 5 0 2.83
Sarepta Therapeutics 0 4 15 0 2.79

Verastem currently has a consensus target price of $7.75, indicating a potential upside of 117.09%. Sarepta Therapeutics has a consensus target price of $65.61, indicating a potential upside of 22.73%. Given Verastem’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Verastem is more favorable than Sarepta Therapeutics.

Insider & Institutional Ownership

24.2% of Verastem shares are held by institutional investors. Comparatively, 65.5% of Sarepta Therapeutics shares are held by institutional investors. 6.5% of Verastem shares are held by company insiders. Comparatively, 9.6% of Sarepta Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Verastem has a beta of 2.16, suggesting that its share price is 116% more volatile than the S&P 500. Comparatively, Sarepta Therapeutics has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Profitability

This table compares Verastem and Sarepta Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verastem N/A -69.88% -59.24%
Sarepta Therapeutics -112.08% -51.72% -43.55%

Verastem Company Profile

Verastem, Inc. is a biopharmaceutical company. The Company is focused on discovering and developing drugs to improve outcomes for patients with cancer. The Company operates in the segment of developing drugs for the treatment of cancer. The Company’s advanced product candidates are VS 6063, VS 4718 and VS 5584. The Company’s programs target the Focal Adhesion Kinase (FAK) and the PI3K/mTOR signaling pathways. FAK is a non-receptor tyrosine kinase encoded by the PTK-2 gene that is involved in cellular adhesion and, in cancer, metastatic capability. The Company’s VS-6063 (defactinib) and VS 4718 are orally available small molecule compounds designed to inhibit FAK signaling. The Company’s VS-5584 is an orally available small molecule that inhibits both mTORC1/2 and PI3K signaling. The Company is engaged in running clinical trials in cancers where there are limited treatment options, including lung, ovarian, lymphoma, pancreatic and other advanced cancers.

Sarepta Therapeutics Company Profile

Sarepta Therapeutics, Inc. is a biopharmaceutical company. The Company focuses on the discovery and development of ribose nucleic acid (RNA)-targeted therapeutics for the treatment of rare neuromuscular diseases. It operates through discovering, developing, manufacturing and delivering therapies to patients with Duchenne muscular dystrophy (DMD). It is focused on the development of its disease-modifying DMD drug candidates. It has received accelerated approval for its product, EXONDYS 51, indicated for the treatment of DMD in patients who have a confirmed mutation of the DMD gene that is amenable to exon 51 skipping. EXONDYS 51 is studied in clinical trials under the name of eteplirsen. Its next generation phosphorodiamidate morpholino oligomer (PMO)-based compounds are synthetic compounds that bind to complementary sequences of RNA by standard Watson-Crick nucleobase pairing. Its PMO-based chemistries are peptide conjugated PMO (PPMO), PMO-X and PMOplus.

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