Head to Head Comparison: InVitae (NVTA) versus Veracyte (NASDAQ:VCYT)

Veracyte (NASDAQ: VCYT) and InVitae (NYSE:NVTA) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.

Profitability

This table compares Veracyte and InVitae’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veracyte -38.19% -52.99% -29.50%
InVitae -206.95% -115.25% -67.79%

Earnings & Valuation

This table compares Veracyte and InVitae’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Veracyte $65.08 million 3.47 -$31.35 million ($0.81) -8.19
InVitae $25.05 million 16.02 -$100.25 million ($2.56) -2.96

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

Risk and Volatility

Veracyte has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, InVitae has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Veracyte and InVitae, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veracyte 0 2 3 0 2.60
InVitae 0 0 4 0 3.00

Veracyte presently has a consensus price target of $12.50, suggesting a potential upside of 88.54%. InVitae has a consensus price target of $14.50, suggesting a potential upside of 91.29%. Given InVitae’s stronger consensus rating and higher probable upside, analysts plainly believe InVitae is more favorable than Veracyte.

Insider & Institutional Ownership

68.8% of Veracyte shares are owned by institutional investors. Comparatively, 64.7% of InVitae shares are owned by institutional investors. 13.4% of Veracyte shares are owned by company insiders. Comparatively, 9.9% of InVitae shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Veracyte beats InVitae on 9 of the 13 factors compared between the two stocks.

About Veracyte

Veracyte, Inc. is a genomic diagnostics company. The Company uses genomic technology to resolve diagnostic ambiguity. It targets diseases in which patients undergo invasive diagnostic procedures. Its products combine genomic technology, clinical science and machine learning. The Company commercializes over three genomic tests, which are transforming the diagnosis of thyroid cancer, lung cancer and idiopathic pulmonary fibrosis. The Company’s commercial solution, the Afirma Thyroid fine needle aspiration (FNA) Analysis, centers on the Afirma Gene Expression Classifier (GEC). The Afirma GEC is offered directly or as part of a solution that also includes cytopathology. The Company operates in the pulmonology diagnostics market. It offers Percepta Bronchial Genomic Classifier, a genomic test to resolve ambiguity in lung cancer diagnosis. It also offers the Envisia Genomic Classifier, which is designed to help in the assessment of patients suspected to have idiopathic pulmonary fibrosis.

About InVitae

Invitae Corporation utilizes an integrated portfolio of laboratory processes, software tools and informatics capabilities to process deoxyribonucleic acid (DNA)-containing samples, analyze information about patient-specific genetic variation and generate test reports for clinicians and their patients. As of December 31, 2016, the Company’s products consisted of assays totaling over 1,100 genes that could be used for multiple indications, including hereditary cancer, neurological disorders, cardiovascular disorders, pediatric disorders and other hereditary conditions. The Company offers panels for a range of hereditary conditions in cancer, cardiology, neuromuscular, pediatric and rare diseases. The Company focuses on genetic testing, genome network and genome management. The Company offers full gene sequencing and deletion/duplication analysis as a standard for all of its tests. The Company holds interests in AltaVoice, a patient-centered data company.

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