Vermillion (VRML) and InVitae (NVTA) Head-To-Head Review

Vermillion (NASDAQ: VRML) and InVitae (NYSE:NVTA) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings and Valuation

This table compares Vermillion and InVitae’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vermillion $2.64 million 42.05 -$14.96 million ($0.20) -9.25
InVitae $25.05 million 21.24 -$100.25 million ($2.56) -3.93

Vermillion has higher earnings, but lower revenue 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.

Analyst Recommendations

This is a summary of recent ratings and price targets for Vermillion and InVitae, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vermillion 0 0 1 0 3.00
InVitae 0 0 4 0 3.00

Vermillion presently has a consensus price target of $2.25, suggesting a potential upside of 21.62%. InVitae has a consensus price target of $14.50, suggesting a potential upside of 44.28%. Given InVitae’s higher probable upside, analysts plainly believe InVitae is more favorable than Vermillion.

Volatility and Risk

Vermillion has a beta of 2.36, indicating that its stock price is 136% more volatile than the S&P 500. Comparatively, InVitae has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Vermillion -332.10% -200.44% -114.50%
InVitae -206.95% -115.25% -67.79%

Insider & Institutional Ownership

34.9% of Vermillion shares are owned by institutional investors. Comparatively, 64.7% of InVitae shares are owned by institutional investors. 3.7% of Vermillion shares are owned by company insiders. Comparatively, 9.9% of InVitae shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

InVitae beats Vermillion on 9 of the 13 factors compared between the two stocks.

About Vermillion

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.

About InVitae

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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