Analyzing Tarsus Pharmaceuticals (NASDAQ:TARS) & XBiotech (NASDAQ:XBIT)

XBiotech (NASDAQ:XBIT) and Tarsus Pharmaceuticals (NASDAQ:TARS) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Volatility and Risk

XBiotech has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Tarsus Pharmaceuticals has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for XBiotech and Tarsus Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
XBiotech	1	0	0	0	1.00
Tarsus Pharmaceuticals	1	2	4	2	2.78

Tarsus Pharmaceuticals has a consensus target price of $90.67, suggesting a potential upside of 38.55%. Given Tarsus Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts clearly believe Tarsus Pharmaceuticals is more favorable than XBiotech.

Insider and Institutional Ownership

55.7% of XBiotech shares are owned by institutional investors. Comparatively, 90.0% of Tarsus Pharmaceuticals shares are owned by institutional investors. 30.8% of XBiotech shares are owned by company insiders. Comparatively, 9.6% of Tarsus Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares XBiotech and Tarsus Pharmaceuticals”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
XBiotech	N/A	N/A	-$45.54 million	($1.32)	-1.74
Tarsus Pharmaceuticals	$535.08 million	5.26	-$66.42 million	($1.14)	-57.40

XBiotech has higher earnings, but lower revenue than Tarsus Pharmaceuticals. Tarsus Pharmaceuticals is trading at a lower price-to-earnings ratio than XBiotech, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares XBiotech and Tarsus Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
XBiotech	N/A	-26.10%	-25.06%
Tarsus Pharmaceuticals	-9.02%	-14.19%	-8.89%

Summary

Tarsus Pharmaceuticals beats XBiotech on 9 of the 14 factors compared between the two stocks.

About XBiotech

XBiotech Inc., a biopharmaceutical company, discovers, develops, and commercializes True Human monoclonal antibodies for treating various diseases. The company focuses on developing a pipeline of product candidates targeting both inflammatory and infectious diseases. It is also developing interleukin-1 alpha therapies to treat variety of medical conditions, such as cancer, stroke, heart attack, or arthritis; and mediates tissue breakdown, angiogenesis, the formation of blood clots, malaise, muscle wasting, and inflammation. The company was incorporated in 2005 and is headquartered in Austin, Texas.

About Tarsus Pharmaceuticals

Tarsus Pharmaceuticals, Inc., a commercial stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutic candidates for eye care in the United States. The company's lead product candidate is XDEMVY, a novel therapeutic for the treatment of blepharitis caused by the infestation of Demodex mites, as well as to treat meibomian gland disease. It is developing TP-04 for the treatment of rosacea; and TP-05 for Lyme prophylaxis and community malaria reduction. In addition, the company develops lotilaner to address diseases across therapeutic categories in human medicine, including eye care, dermatology, and other infectious disease prevention. Tarsus Pharmaceuticals, Inc. was incorporated in 2016 and is headquartered in Irvine, California.