Castle Biosciences (NASDAQ:CSTL) and DermTech (NASDAQ:DMTK) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.
Profitability
This table compares Castle Biosciences and DermTech's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Castle Biosciences | -5.30% | -2.69% | -2.05% |
DermTech | -577.75% | -65.00% | -58.37% |
Valuation and Earnings
This table compares Castle Biosciences and DermTech's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Castle Biosciences | $51.87 million | 26.53 | $5.28 million | ($0.81) | -84.28 |
DermTech | $3.36 million | 308.97 | $-19,690,000.00 | ($2.81) | -18.85 |
Castle Biosciences has higher revenue and earnings than DermTech. Castle Biosciences is trading at a lower price-to-earnings ratio than DermTech, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and price targets for Castle Biosciences and DermTech, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Castle Biosciences | 0 | 0 | 5 | 0 | 3.00 |
DermTech | 0 | 0 | 6 | 0 | 3.00 |
Castle Biosciences presently has a consensus price target of $73.80, indicating a potential upside of 8.10%. DermTech has a consensus price target of $50.25, indicating a potential downside of 5.15%. Given Castle Biosciences' higher possible upside, analysts clearly believe Castle Biosciences is more favorable than DermTech.
Volatility and Risk
Castle Biosciences has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, DermTech has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.
Institutional & Insider Ownership
66.4% of Castle Biosciences shares are owned by institutional investors. Comparatively, 51.4% of DermTech shares are owned by institutional investors. 39.7% of Castle Biosciences shares are owned by insiders. Comparatively, 16.5% of DermTech shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Castle Biosciences beats DermTech on 9 of the 13 factors compared between the two stocks.