Harmony Biosciences (NASDAQ:HRMY – Get Free Report) and Verrica Pharmaceuticals (NASDAQ:VRCA – Get Free Report) are both healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.
Insider & Institutional Ownership
86.2% of Harmony Biosciences shares are held by institutional investors. Comparatively, 42.5% of Verrica Pharmaceuticals shares are held by institutional investors. 11.0% of Harmony Biosciences shares are held by company insiders. Comparatively, 52.9% of Verrica Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
Harmony Biosciences has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Verrica Pharmaceuticals has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Harmony Biosciences | $868.45 million | 2.79 | $158.69 million | $3.08 | 13.51 |
| Verrica Pharmaceuticals | $35.58 million | 2.44 | -$17.89 million | ($1.67) | -3.03 |
Harmony Biosciences has higher revenue and earnings than Verrica Pharmaceuticals. Verrica Pharmaceuticals is trading at a lower price-to-earnings ratio than Harmony Biosciences, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Harmony Biosciences and Verrica Pharmaceuticals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Harmony Biosciences | 18.88% | 20.06% | 14.15% |
| Verrica Pharmaceuticals | -102.84% | -407.11% | -70.17% |
Analyst Recommendations
This is a summary of current ratings and price targets for Harmony Biosciences and Verrica Pharmaceuticals, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Harmony Biosciences | 1 | 5 | 5 | 0 | 2.36 |
| Verrica Pharmaceuticals | 1 | 1 | 3 | 0 | 2.40 |
Harmony Biosciences currently has a consensus price target of $47.11, indicating a potential upside of 13.19%. Verrica Pharmaceuticals has a consensus price target of $12.67, indicating a potential upside of 150.33%. Given Verrica Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts clearly believe Verrica Pharmaceuticals is more favorable than Harmony Biosciences.
Summary
Harmony Biosciences beats Verrica Pharmaceuticals on 10 of the 14 factors compared between the two stocks.
About Harmony Biosciences
Harmony Biosciences Holdings, Inc., a commercial-stage pharmaceutical company, focuses on developing and commercializing therapies for patients with rare and other neurological diseases in the United States. The company offers WAKIX (pitolisant), a molecule with a novel mechanism of action for the treatment of excessive daytime sleepiness in adult patients with narcolepsy. It also offers HBS-102, a melanin-concentrating hormone receptor 1 for MCH neurons. The company was formerly known as Harmony Biosciences II, Inc. and changed its name to Harmony Biosciences Holdings, Inc. in February 2020. Harmony Biosciences Holdings, Inc. was incorporated in 2017 and is headquartered in Plymouth Meeting, Pennsylvania.
About Verrica Pharmaceuticals
Verrica Pharmaceuticals Inc., a clinical-stage dermatology therapeutics company, develops medications for the treatment of skin diseases in the United States. Its product pipeline comprises YCANTH (VP-102), which is in phase III clinical trial for the treatment of common warts; and has completed phase II clinical trial for the treatment of external genital warts. The company also develops VP-315, an oncolytic peptide-based injectable therapy, which is in phase II clinical trial for the treatment of dermatology oncologic conditions which includes basal cell carcinoma; and VP-103, a cantharidin-based product candidate for the treatment of plantar warts and is in phase II clinical trial. In addition, it offers YCANTH for the treatment of molluscum contagiosum. The company has a collaboration and license agreement with Torii Pharmaceutical Co., Ltd. for the development and commercialization of its product candidates for the treatment of molluscum contagiosum and common warts in Japan, including VP-102; and a license agreement with Lytix Biopharma AS to develop and commercialize VP-315 for dermatological oncology indications, such as non-metastatic melanoma and non-metastatic merkel cell carcinoma. Verrica Pharmaceuticals Inc. was incorporated in 2013 and is headquartered in West Chester, Pennsylvania.
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