Equillium (NASDAQ:EQ) vs. Histogen (NASDAQ:HSTO) Critical Review

Equillium (NASDAQ:EQ) and Histogen (NASDAQ:HSTO) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Volatility and Risk

Equillium has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Histogen has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Profitability

This table compares Equillium and Histogen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equillium N/A -46.35% -38.85%
Histogen -1,018.14% -84.22% -59.98%

Analyst Ratings

This is a summary of recent recommendations for Equillium and Histogen, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equillium 0 0 5 0 3.00
Histogen 0 0 2 0 3.00

Equillium presently has a consensus price target of $14.50, indicating a potential upside of 169.02%. Histogen has a consensus price target of $3.20, indicating a potential upside of 508.60%. Given Histogen’s higher possible upside, analysts plainly believe Histogen is more favorable than Equillium.

Earnings and Valuation

This table compares Equillium and Histogen’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equillium N/A N/A -$29.81 million ($1.35) -3.99
Histogen $2.06 million 10.65 -$18.77 million ($0.59) -0.89

Histogen has higher revenue and earnings than Equillium. Equillium is trading at a lower price-to-earnings ratio than Histogen, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

24.2% of Equillium shares are owned by institutional investors. Comparatively, 12.6% of Histogen shares are owned by institutional investors. 32.7% of Equillium shares are owned by company insiders. Comparatively, 10.2% of Histogen shares are owned 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.

Summary

Equillium beats Histogen on 7 of the 12 factors compared between the two stocks.

About Equillium

Equillium, Inc. engages in the development of products for severe autoimmune and inflammatory, or immuno-inflammatory, disorders with high unmet medical need. Its product pipeline includes EQ001, which is a monoclonal antibody that selectively targets the novel immune checkpoint receptor CD6. The company was founded by Daniel Mark Bradbury, Bruce D. Steel, and Stephen Connelly on March 16, 2017 and is headquartered in La Jolla, CA.

About Histogen

Histogen, Inc. engages in the development of potential first-in-class restorative therapeutics that ignite the body’s natural process to repair and maintain healthy biological function. It focuses in Human Multipotent Cell Conditioned Media, Human Extracellular Matrix, and Hair Stimulating Complex. The company was founded by Steven J. Mento and Gail K. Naughton on July 13, 2005 and is headquartered in San Diego, CA.

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