InVitae (NYSE: NVTA) and Vermillion (NASDAQ:VRML) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.
Volatility and Risk
InVitae has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Vermillion has a beta of 2.37, indicating that its stock price is 137% more volatile than the S&P 500.
This table compares InVitae and Vermillion’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|InVitae||$25.05 million||18.07||-$100.25 million||($2.56)||-3.34|
|Vermillion||$2.64 million||46.36||-$14.96 million||($0.21)||-9.71|
Vermillion has lower revenue, but higher earnings than InVitae. Vermillion is trading at a lower price-to-earnings ratio than InVitae, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
66.5% of InVitae shares are held by institutional investors. Comparatively, 34.9% of Vermillion shares are held by institutional investors. 9.9% of InVitae shares are held by company insiders. Comparatively, 3.7% of Vermillion shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares InVitae and Vermillion’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and target prices for InVitae and Vermillion, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
InVitae currently has a consensus target price of $14.33, indicating a potential upside of 67.64%. Vermillion has a consensus target price of $2.25, indicating a potential upside of 10.29%. Given InVitae’s higher possible upside, research analysts clearly believe InVitae is more favorable than Vermillion.
InVitae beats Vermillion on 8 of the 12 factors compared between the two stocks.
InVitae 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.
Vermillion Company Profile
Vermillion, Inc. is a diagnostic service and bio-analytic solutions provider. The Company is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. It sells OVA1 risk of malignancy test for pelvic mass disease (OVA1). OVA1 is a blood test designed to, in addition to a physician’s clinical assessment of a woman with a pelvic mass, identify women who are at risk of having a malignant ovarian tumor prior to planned surgery. It developed OVA1 through pre-clinical studies in collaboration with various academic medical centers encompassing over 2,500 clinical samples. OVA1 is validated in a multi-center clinical trial encompassing approximately 30 sites reflective of the diverse nature of the clinical centers, at which ovarian adnexal masses are evaluated. Its ASPiRA LABS is a laboratory that provides diagnostic services using a biomarker-based diagnostic algorithm to inform clinical decision making and personalized treatment plans.
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