Fate Therapeutics (NASDAQ:FATE – Get Free Report) and Seres Therapeutics (NASDAQ:MCRB – Get Free Report) are both small-cap healthcare companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.
Insider and Institutional Ownership
97.5% of Fate Therapeutics shares are owned by institutional investors. Comparatively, 59.3% of Seres Therapeutics shares are owned by institutional investors. 4.7% of Fate Therapeutics shares are owned by insiders. Comparatively, 5.2% of Seres Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Fate Therapeutics and Seres Therapeutics”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Fate Therapeutics | $6.65 million | 36.76 | -$136.32 million | ($1.05) | -1.94 |
| Seres Therapeutics | $790,000.00 | 24.93 | $5.70 million | ($2.43) | -0.81 |
Seres Therapeutics has lower revenue, but higher earnings than Fate Therapeutics. Fate Therapeutics is trading at a lower price-to-earnings ratio than Seres Therapeutics, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Fate Therapeutics and Seres Therapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Fate Therapeutics | -1,941.09% | -65.08% | -41.73% |
| Seres Therapeutics | -1,192.94% | -114.82% | -34.15% |
Risk and Volatility
Fate Therapeutics has a beta of 2.65, meaning that its share price is 165% more volatile than the S&P 500. Comparatively, Seres Therapeutics has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current recommendations and price targets for Fate Therapeutics and Seres Therapeutics, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Fate Therapeutics | 1 | 2 | 4 | 0 | 2.43 |
| Seres Therapeutics | 1 | 1 | 2 | 0 | 2.25 |
Fate Therapeutics presently has a consensus target price of $5.90, suggesting a potential upside of 189.22%. Seres Therapeutics has a consensus target price of $17.00, suggesting a potential upside of 767.35%. Given Seres Therapeutics’ higher probable upside, analysts clearly believe Seres Therapeutics is more favorable than Fate Therapeutics.
Summary
Fate Therapeutics beats Seres Therapeutics on 8 of the 13 factors compared between the two stocks.
About Fate Therapeutics
Fate Therapeutics, Inc., a clinical-stage biopharmaceutical company, develops programmed cellular immunotherapies for cancer and immune disorders worldwide. The company's chimeric antigen receptor (CAR)-targeted NK and T-cell product candidates include FT576 to treat multiple myeloma, and FT522, to treat lymphoma and autoimmune disorders. Its CAR T-cell programs include FT819 to treat hematologic malignancies and solid tumors, and FT825 to treat solid tumors. The company has a collaboration and option agreement with Ono Pharmaceutical Co. Ltd. for the development and commercialization of off-the-shelf, iPSC-derived CAR T-cell product candidates for the treatment of cancer. Fate Therapeutics, Inc. was incorporated in 2007 and is headquartered in San Diego, California.
About Seres Therapeutics
Seres Therapeutics, Inc., a microbiome therapeutics company, develop microbiome therapeutics to treat the modulation of the colonic microbiome. It develops a novel class of biological drugs that are designed to treat by modulating the microbiome to restore health by repairing the function of a disrupted microbiome to a non-disease state. The company’s lead product candidate is VOWST, an oral microbiome therapeutic that has completed Phase III clinical trial for the treatment of recurrent Clostridioides difficile infection. Its product pipeline also includes SER-155, an investigational oral fermented microbiome therapeutic which is in Phase 1b clinical trials for the treatment of gastrointestinal infections, bacteremia, and graft versus host disease in immunocompromised patients including patients receiving allogeneic hematopoietic stem cell transplantation. In addition, the company engages in the development of SER-287 which is in Phase 2b and SER-301 that is in Phase 1b to treat ulcerative colitis. Further, it has license Agreement with NHSc Rx License GmbH for the therapeutic products based on the microbiome technology, which includes VOWST product candidate, which is developed for the treatment of CDI and recurrent CDI; and collaboration license agreement with Société des Produits Nestlé S.A. (Nestlé) for the development and commercialization of certain product candidates for the treatment and management of CDI and inflammatory bowel disease including UC and Crohn’s disease. The company was formerly known as Seres Health, Inc. and changed its name to Seres Therapeutics, Inc. in May 2015. Seres Therapeutics, Inc. was incorporated in 2010 and is headquartered in Cambridge, Massachusetts.
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