Analyzing Foghorn Therapeutics (NASDAQ:FHTX) and Vanda Pharmaceuticals (NASDAQ:VNDA)

Foghorn Therapeutics (NASDAQ:FHTX) and Vanda Pharmaceuticals (NASDAQ:VNDA) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Valuation & Earnings

This table compares Foghorn Therapeutics and Vanda Pharmaceuticals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Foghorn Therapeutics	$30.91 million	9.40	-$74.28 million	($1.17)	-4.23
Vanda Pharmaceuticals	$216.10 million	2.37	-$220.47 million	($3.73)	-2.33

Foghorn Therapeutics has higher earnings, but lower revenue than Vanda Pharmaceuticals. Foghorn Therapeutics is trading at a lower price-to-earnings ratio than Vanda Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Foghorn Therapeutics has a beta of 3.02, meaning that its share price is 202% more volatile than the S&P 500. Comparatively, Vanda Pharmaceuticals has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Profitability

This table compares Foghorn Therapeutics and Vanda Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Foghorn Therapeutics	-240.33%	N/A	-33.46%
Vanda Pharmaceuticals	-102.02%	-23.85%	-18.20%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Foghorn Therapeutics and Vanda Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Foghorn Therapeutics	1	0	8	1	2.90
Vanda Pharmaceuticals	1	2	5	0	2.50

Foghorn Therapeutics presently has a consensus target price of $11.13, suggesting a potential upside of 124.75%. Vanda Pharmaceuticals has a consensus target price of $14.90, suggesting a potential upside of 71.78%. Given Foghorn Therapeutics’ stronger consensus rating and higher probable upside, research analysts plainly believe Foghorn Therapeutics is more favorable than Vanda Pharmaceuticals.

Institutional and Insider Ownership

61.5% of Foghorn Therapeutics shares are owned by institutional investors. Comparatively, 88.1% of Vanda Pharmaceuticals shares are owned by institutional investors. 7.6% of Foghorn Therapeutics shares are owned by company insiders. Comparatively, 8.9% of Vanda Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Foghorn Therapeutics beats Vanda Pharmaceuticals on 9 of the 15 factors compared between the two stocks.

About Foghorn Therapeutics

Foghorn Therapeutics Inc., a clinical-stage biopharmaceutical company, engages in the discovery and development of medicines targeting genetically determined dependencies within the chromatin regulatory system in the United States. The company uses its proprietary Gene Traffic Control platform to identify, validate, and potentially drug targets within the system. It develops FHD-286, a small molecule inhibitor of the enzymatic activity of BRG1 and BRM that is in phase I for the treatment of relapsed and/or refractory acute myeloid leukemia/myelodysplastic syndrome. The company is also developing therapies for mutant cancers, such as Non-Small Cell Lung, bladder, endometrial, colorectal, and melanoma cancers; and dependent cancers, including prostate cancer and diffuse large b-cell lymphoma. It has a research collaboration and license agreement with Merck Sharp & Dohme Corp. to discover and develop novel oncology therapeutics against a transcription factor target; and Eli Lilly and Company for developing FHD-909, a selective ATPase inhibitor of BRM. Foghorn Therapeutics Inc. was incorporated in 2015 and is headquartered in Cambridge, Massachusetts.

About Vanda Pharmaceuticals

Vanda Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of therapies to address high unmet medical needs worldwide. The company’s marketed products include HETLIOZ to treat non-24-hour sleep-wake disorders; and Fanapt oral tablets for the treatment of schizophrenia. Its pipeline products include HETLIOZ (tasimelteon) to treat jet lag disorder, insomnia, delayed sleep phase disorder, sleep disturbances in autism spectrum disorder, and pediatric Non-24; Fanapt (iloperidone) for the treatment of bipolar I disorder and Parkinson’s disease psychosis, as well as a long acting injectable (LAI) formulation to treat schizophrenia; and Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist to treat gastroparesis, motion sickness, atopic dermatitis, and COVID-19 pneumonia. The company’s pipeline products also include VTR-297, a small molecule histone deacetylase inhibitor to treat hematologic malignancies and with potential use as a treatment for various oncology indications; VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist to treat performance anxiety and psychiatric disorders; VHX-896, an active metabolite of iloperidone; and antisense oligonucleotide molecules. In addition, it offers a portfolio of cystic fibrosis transmembrane conductance regulator activators and inhibitors that include VSJ-110 for the treatment of dry eye and ocular inflammation; and VPO-227 for the treatment of secretory diarrhea disorders comprising cholera. Vanda Pharmaceuticals Inc. was incorporated in 2002 and is headquartered in Washington, the District of Columbia.