Natera (NASDAQ: NTRA) and Veracyte (NASDAQ:VCYT) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.
This table compares Natera and Veracyte’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Insider & Institutional Ownership
69.4% of Natera shares are held by institutional investors. Comparatively, 71.5% of Veracyte shares are held by institutional investors. 13.2% of Natera shares are held by company insiders. Comparatively, 13.7% of Veracyte shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Natera and Veracyte’s top-line revenue, earnings per share and valuation.
||Earnings Per Share
Veracyte has lower revenue, but higher earnings than Natera. Veracyte is trading at a lower price-to-earnings ratio than Natera, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for Natera and Veracyte, as provided by MarketBeat.
||Strong Buy Ratings
Natera presently has a consensus target price of $19.00, indicating a potential downside of 1.30%. Veracyte has a consensus target price of $9.13, indicating a potential downside of 8.12%. Given Natera’s stronger consensus rating and higher possible upside, research analysts plainly believe Natera is more favorable than Veracyte.
Volatility and Risk
Natera has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500. Comparatively, Veracyte has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500.
Natera Company Profile
Natera, Inc., a diagnostics company, provides preconception and prenatal genetic testing services. It primarily offers Panorama, a non-invasive prenatal test that screens for chromosomal abnormalities of a fetus typically with a blood draw from the mother; Vistara, a single-gene mutations screening test to identify single-gene disorder; Horizon carrier screening to determine carrier status for various genetic diseases that could be passed on to the carrier's children; and Spectrum pre-implantation genetic screening and Spectrum pre-implantation genetic diagnosis to analyze chromosomal anomalies or inherited genetic conditions during an in vitro fertilization cycle. The company also provides Anora Products of Conception test to analyze fetal chromosomes to understand the cause of miscarriage; and non-invasive paternity testing products to determine paternity by analyzing the fragments of fetal deoxyribonucleic acid in a pregnant mother's blood and a blood sample from the alleged father. In addition, it offers Constellation, a cloud-based software product that allows laboratory customers to gain access through the cloud to the company's algorithms and bioinformatics in order to validate and launch tests. The company offers products through its direct sales force, as well as through a network of approximately 70 laboratory and distribution partners in the United States and internationally. The company was formerly known as Gene Security Network, Inc. and changed its name to Natera, Inc. in 2012. Natera, Inc. was founded in 2003 and is headquartered in San Carlos, California.
Veracyte Company Profile
Veracyte, Inc. operates as a genomic diagnostics company in the United States. The company uses genomic technology to resolve diagnostic uncertainty. It offers Afirma Thyroid FNA Analysis solution; cytopathology testing services; and the Afirma Malignancy Classifiers to manage thyroid nodule patients. The company's products also include Percepta Bronchial Genomic Classifier solution for use in lung cancer screening and diagnosis; and Envisia Genomic Classifier solution for idiopathic pulmonary fibrosis. Veracyte, Inc. sells its products through product specialists, institutional managers, account managers, and medical science specialists. Veracyte, Inc. has research collaboration agreement with Loxo Oncology to develop medicines for patients with genetically defined cancers. The company was formerly known as Calderome, Inc. and changed its name to Veracyte, Inc. in March 2008. Veracyte, Inc. was incorporated in 2006 and is headquartered in South San Francisco, California.
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