TRACON Pharmaceuticals (NASDAQ:TCON) and Gritstone Oncology (NASDAQ:GRTS) are both small-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.
Risk and Volatility
TRACON Pharmaceuticals has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500. Comparatively, Gritstone Oncology has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for TRACON Pharmaceuticals and Gritstone Oncology, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| TRACON Pharmaceuticals | 0 | 0 | 4 | 0 | 3.00 |
| Gritstone Oncology | 1 | 0 | 2 | 0 | 2.33 |
TRACON Pharmaceuticals presently has a consensus target price of $16.6667, indicating a potential upside of 106.78%. Gritstone Oncology has a consensus target price of $22.3333, indicating a potential upside of 158.49%. Given Gritstone Oncology's higher probable upside, analysts plainly believe Gritstone Oncology is more favorable than TRACON Pharmaceuticals.
Profitability
This table compares TRACON Pharmaceuticals and Gritstone Oncology's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| TRACON Pharmaceuticals | N/A | -273.66% | -84.56% |
| Gritstone Oncology | -2,962.52% | -101.31% | -68.78% |
Valuation & Earnings
This table compares TRACON Pharmaceuticals and Gritstone Oncology's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| TRACON Pharmaceuticals | $3 million | 41.59 | $-22,670,000.00 | ($7.47) | -1.08 |
| Gritstone Oncology | $4.36 million | 97.01 | $-94,430,000.00 | ($2.81) | -3.07 |
TRACON Pharmaceuticals has higher earnings, but lower revenue than Gritstone Oncology. Gritstone Oncology is trading at a lower price-to-earnings ratio than TRACON Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
42.0% of TRACON Pharmaceuticals shares are held by institutional investors. Comparatively, 59.0% of Gritstone Oncology shares are held by institutional investors. 23.3% of TRACON Pharmaceuticals shares are held by company insiders. Comparatively, 38.0% of Gritstone Oncology shares are held 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.
Summary
Gritstone Oncology beats TRACON Pharmaceuticals on 8 of the 14 factors compared between the two stocks.
