Financial Contrast: Seres Therapeutics (NASDAQ:MCRB) and Castle Biosciences (NASDAQ:CSTL)

Seres Therapeutics (NASDAQ:MCRB) and Castle Biosciences (NASDAQ:CSTL) are both small-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for Seres Therapeutics and Castle Biosciences, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seres Therapeutics	2	1	1	0	1.75
Castle Biosciences	1	0	7	1	2.89

Seres Therapeutics presently has a consensus target price of $14.33, suggesting a potential downside of 7.17%. Castle Biosciences has a consensus target price of $39.14, suggesting a potential downside of 1.30%. Given Castle Biosciences’ stronger consensus rating and higher probable upside, analysts clearly believe Castle Biosciences is more favorable than Seres Therapeutics.

Profitability

This table compares Seres Therapeutics and Castle Biosciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seres Therapeutics	N/A	-132.84%	-31.66%
Castle Biosciences	-3.56%	1.73%	1.47%

Volatility and Risk

Seres Therapeutics has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500. Comparatively, Castle Biosciences has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Institutional and Insider Ownership

59.3% of Seres Therapeutics shares are owned by institutional investors. Comparatively, 92.6% of Castle Biosciences shares are owned by institutional investors. 4.7% of Seres Therapeutics shares are owned by insiders. Comparatively, 6.5% of Castle Biosciences shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Seres Therapeutics and Castle Biosciences”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seres Therapeutics	$126.32 million	1.11	$140,000.00	($3.57)	-4.32
Castle Biosciences	$332.07 million	3.49	$18.25 million	($0.45)	-88.13

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

Summary

Castle Biosciences beats Seres Therapeutics on 13 of the 15 factors compared between the two stocks.

About Seres Therapeutics

Seres Therapeutics, Inc., a microbiome therapeutics company, develop microbiome therapeutics to treat the modulation of the colonic microbiome. It develops a novel class of biological drugs that are designed to treat by modulating the microbiome to restore health by repairing the function of a disrupted microbiome to a non-disease state. The company’s lead product candidate is VOWST, an oral microbiome therapeutic that has completed Phase III clinical trial for the treatment of recurrent Clostridioides difficile infection. Its product pipeline also includes SER-155, an investigational oral fermented microbiome therapeutic which is in Phase 1b clinical trials for the treatment of gastrointestinal infections, bacteremia, and graft versus host disease in immunocompromised patients including patients receiving allogeneic hematopoietic stem cell transplantation. In addition, the company engages in the development of SER-287 which is in Phase 2b and SER-301 that is in Phase 1b to treat ulcerative colitis. Further, it has license Agreement with NHSc Rx License GmbH for the therapeutic products based on the microbiome technology, which includes VOWST product candidate, which is developed for the treatment of CDI and recurrent CDI; and collaboration license agreement with Société des Produits Nestlé S.A. (Nestlé) for the development and commercialization of certain product candidates for the treatment and management of CDI and inflammatory bowel disease including UC and Crohn’s disease. The company was formerly known as Seres Health, Inc. and changed its name to Seres Therapeutics, Inc. in May 2015. Seres Therapeutics, Inc. was incorporated in 2010 and is headquartered in Cambridge, Massachusetts.

About Castle Biosciences

Castle Biosciences, Inc., a molecular diagnostics company, provides testing solutions for the diagnosis and treatment of dermatologic cancers, Barrett's esophagus, uveal melanoma, and mental health conditions. It offers DecisionDx-Melanoma, a risk stratification gene expression profile (GEP) test to identify the risk of metastasis for patients diagnosed with invasive cutaneous melanoma; DecisionDx-SCC, a proprietary risk stratification GEP test for patients with cutaneous squamous cell carcinoma; MyPath Melanoma, a test used for patients with difficult-to-diagnose melanocytic lesions; and TissueCypher, a spatial omics test to predict future development of high-grade dysplasia and/or esophageal cancer in patients with non-dysplastic, indefinite dysplasia, or low-grade dysplasia Barrett's esophagus. In addition, the company provides DecisionDx-UM test, a proprietary risk stratification GEP test that predicts the risk of metastasis for patients with uveal melanoma; and IDgenetix, a pharmacogenomic test that helps guide drug treatment for major depressive disorder, schizophrenia, bipolar disorder, anxiety disorders, social phobia, obsessive-compulsive personality disorder, post-traumatic stress disorder, and attention deficit hyperactivity disorder. It offers its products to skin cancer, gastroenterology, and mental health markets. The company was incorporated in 2007 and is headquartered in Friendswood, Texas.