Financial Contrast: HH&L Acquisition (NYSE:HHLA) versus Veracyte (NASDAQ:VCYT)

HH&L Acquisition (NYSE:HHLA) and Veracyte (NASDAQ:VCYT) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.

Volatility & Risk

HH&L Acquisition has a beta of -0.01, indicating that its stock price is 101% less volatile than the S&P 500. Comparatively, Veracyte has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Insider and Institutional Ownership

39.2% of HH&L Acquisition shares are owned by institutional investors. 0.5% of HH&L Acquisition shares are owned by insiders. Comparatively, 2.6% of Veracyte shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares HH&L Acquisition and Veracyte’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HH&L Acquisition	N/A	N/A	$17.69 million	($0.14)	-76.78
Veracyte	$361.05 million	4.48	-$74.40 million	($1.03)	-21.51

HH&L Acquisition has higher earnings, but lower revenue than Veracyte. HH&L Acquisition is trading at a lower price-to-earnings ratio than Veracyte, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares HH&L Acquisition and Veracyte’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HH&L Acquisition	N/A	-57.47%	-0.35%
Veracyte	-20.61%	-2.02%	-1.89%

Analyst Recommendations

This is a summary of current recommendations and price targets for HH&L Acquisition and Veracyte, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HH&L Acquisition	0	0	0	0	N/A
Veracyte	1	0	4	0	2.60

Veracyte has a consensus price target of $30.00, indicating a potential upside of 35.38%. Given Veracyte’s higher probable upside, analysts plainly believe Veracyte is more favorable than HH&L Acquisition.

Summary

Veracyte beats HH&L Acquisition on 7 of the 12 factors compared between the two stocks.

About HH&L Acquisition

HH&L Acquisition Co. does not have significant operations. It focuses on effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. The company intends to focus on healthcare or healthcare-related companies in Asian markets. HH&L Acquisition Co. was incorporated in 2020 and is based in Central, Hong Kong.

About Veracyte

Veracyte, Inc. operates as a diagnostics company in the United States and internationally. The company offers Afirma Genomic Sequencing Classifier for cancerous thyroid nodules; Decipher Prostate Biopsy and Radical Prostatectomy for prostate cancer diagnosis; Prosigna Breast Cancer Assay for breast cancer diagnosis; Percepta Nasal Swab Test for lung cancer diagnosis; and Envisia Genomic Classifier for diagnosing interstitial lung disease, including idiopathic pulmonary fibrosis. It is also developing Envisia Classifier, the nCounter analysis system; and LymphMark for lymphoma subtyping test. 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.