Trevi Therapeutics (NASDAQ:TRVI) versus Castle Biosciences (NASDAQ:CSTL) Critical Analysis

Castle Biosciences (NASDAQ:CSTL) and Trevi Therapeutics (NASDAQ:TRVI) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Castle Biosciences and Trevi Therapeutics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Castle Biosciences	1	1	7	1	2.80
Trevi Therapeutics	1	0	8	2	3.00

Castle Biosciences currently has a consensus price target of $42.43, suggesting a potential upside of 72.75%. Trevi Therapeutics has a consensus price target of $22.67, suggesting a potential upside of 23.19%. Given Castle Biosciences’ higher probable upside, equities analysts plainly believe Castle Biosciences is more favorable than Trevi Therapeutics.

Insider and Institutional Ownership

92.6% of Castle Biosciences shares are owned by institutional investors. Comparatively, 95.8% of Trevi Therapeutics shares are owned by institutional investors. 6.1% of Castle Biosciences shares are owned by insiders. Comparatively, 18.3% of Trevi Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Castle Biosciences has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Trevi Therapeutics has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Profitability

This table compares Castle Biosciences and Trevi Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Castle Biosciences	-3.78%	-2.77%	-2.30%
Trevi Therapeutics	N/A	-24.53%	-23.37%

Valuation & Earnings

This table compares Castle Biosciences and Trevi Therapeutics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Castle Biosciences	$339.92 million	2.19	-$24.16 million	($0.44)	-55.82
Trevi Therapeutics	N/A	N/A	-$42.76 million	($0.32)	-57.50

Castle Biosciences has higher revenue and earnings than Trevi Therapeutics. Trevi Therapeutics is trading at a lower price-to-earnings ratio than Castle Biosciences, indicating that it is currently the more affordable of the two stocks.

Summary

Trevi Therapeutics beats Castle Biosciences on 7 of the 13 factors compared between the two stocks.

About Castle Biosciences

Castle Biosciences, Inc., a molecular diagnostics company, provides testing solutions for the diagnosis and treatment of dermatologic cancers, Barrett's esophagus, uveal melanoma, and mental health conditions. It offers DecisionDx-Melanoma, a risk stratification gene expression profile (GEP) test to identify the risk of metastasis for patients diagnosed with invasive cutaneous melanoma; DecisionDx-SCC, a proprietary risk stratification GEP test for patients with cutaneous squamous cell carcinoma; MyPath Melanoma, a test used for patients with difficult-to-diagnose melanocytic lesions; and TissueCypher, a spatial omics test to predict future development of high-grade dysplasia and/or esophageal cancer in patients with non-dysplastic, indefinite dysplasia, or low-grade dysplasia Barrett's esophagus. In addition, the company provides DecisionDx-UM test, a proprietary risk stratification GEP test that predicts the risk of metastasis for patients with uveal melanoma; and IDgenetix, a pharmacogenomic test that helps guide drug treatment for major depressive disorder, schizophrenia, bipolar disorder, anxiety disorders, social phobia, obsessive-compulsive personality disorder, post-traumatic stress disorder, and attention deficit hyperactivity disorder. It offers its products to skin cancer, gastroenterology, and mental health markets. The company was incorporated in 2007 and is headquartered in Friendswood, Texas.

About Trevi Therapeutics

Trevi Therapeutics, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of therapy Haduvio for the treatment of chronic cough in idiopathic pulmonary fibrosis (IPF) and refractory chronic cough (RCC) conditions targeting the central and peripheral nervous systems. The company is developing Haduvio, an oral extended-release formulation of nalbuphine, which is in phase 2b Cough Reduction in IPF with nalbuphine ER (CORAL) clinical trial for treatment of chronic cough in patients with IPF; phase 2a Refractory Chronic Cough Improvement Via NAL ER (RIVER) clinical trial for reducing chronic cough in RCC patients; phase 2 clinical trial in patients with pruritus; phase 2b/3 clinical trial in patients with prurigo nodularis. It has a license agreement with Endo Pharmaceuticals Inc. to develop and commercialize products incorporating nalbuphine hydrochloride in any formulation. The company was incorporated in 2011 and is headquartered in New Haven, Connecticut.