Castle Biosciences (NASDAQ:CSTL – Get Free Report) and Eledon Pharmaceuticals (NASDAQ:ELDN – Get Free Report) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.
Risk and Volatility
Castle Biosciences has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Eledon Pharmaceuticals has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.
Earnings and Valuation
This table compares Castle Biosciences and Eledon Pharmaceuticals”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Castle Biosciences | $344.23 million | 1.86 | -$24.16 million | ($0.44) | -48.00 |
| Eledon Pharmaceuticals | N/A | N/A | -$45.62 million | ($0.77) | -5.09 |
Castle Biosciences has higher revenue and earnings than Eledon Pharmaceuticals. Castle Biosciences is trading at a lower price-to-earnings ratio than Eledon Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Castle Biosciences and Eledon Pharmaceuticals, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Castle Biosciences | 1 | 1 | 7 | 0 | 2.67 |
| Eledon Pharmaceuticals | 1 | 1 | 3 | 0 | 2.40 |
Castle Biosciences currently has a consensus price target of $42.83, suggesting a potential upside of 102.81%. Eledon Pharmaceuticals has a consensus price target of $9.67, suggesting a potential upside of 146.60%. Given Eledon Pharmaceuticals’ higher probable upside, analysts clearly believe Eledon Pharmaceuticals is more favorable than Castle Biosciences.
Institutional & Insider Ownership
92.6% of Castle Biosciences shares are held by institutional investors. Comparatively, 56.8% of Eledon Pharmaceuticals shares are held by institutional investors. 6.1% of Castle Biosciences shares are held by insiders. Comparatively, 9.6% of Eledon Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Castle Biosciences and Eledon Pharmaceuticals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Castle Biosciences | -3.78% | -2.77% | -2.30% |
| Eledon Pharmaceuticals | N/A | -116.97% | -41.91% |
Summary
Castle Biosciences beats Eledon Pharmaceuticals on 9 of the 13 factors compared between the two stocks.
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.
About Eledon Pharmaceuticals
Eledon Pharmaceuticals, Inc. operates as a clinical stage biotechnology company. The company uses its immunology expertise in targeting the CD40 Ligand (CD40L, also called CD154) pathway to develop therapies to protect transplanted organs and prevent rejection, and to treat amyotrophic lateral sclerosis (ALS). The company's lead compound in development is tegoprubart, an IgG1 and anti-CD40L antibody with high affinity for CD40 Ligand, a biological target with therapeutic potential. It has a collaboration agreement with eGenesis, Inc. The company was formerly known as Novus Therapeutics, Inc. and changed its name to Eledon Pharmaceuticals, Inc. in January 2021. Eledon Pharmaceuticals, Inc. is headquartered in Irvine, California.
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