Comparing Enanta Pharmaceuticals (NASDAQ:ENTA) & Verrica Pharmaceuticals (NASDAQ:VRCA)

Enanta Pharmaceuticals (NASDAQ:ENTA) and Verrica Pharmaceuticals (NASDAQ:VRCA) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Risk & Volatility

Enanta Pharmaceuticals has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Verrica Pharmaceuticals has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Profitability

This table compares Enanta Pharmaceuticals and Verrica Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enanta Pharmaceuticals	-89.56%	-64.04%	-20.22%
Verrica Pharmaceuticals	-47.97%	-1,077.78%	-40.76%

Valuation & Earnings

This table compares Enanta Pharmaceuticals and Verrica Pharmaceuticals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enanta Pharmaceuticals	$65.32 million	5.79	-$81.89 million	($2.59)	-5.02
Verrica Pharmaceuticals	$37.16 million	2.43	-$17.89 million	($1.03)	-5.11

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

Insider and Institutional Ownership

95.0% of Enanta Pharmaceuticals shares are owned by institutional investors. Comparatively, 42.5% of Verrica Pharmaceuticals shares are owned by institutional investors. 11.5% of Enanta Pharmaceuticals shares are owned by insiders. Comparatively, 54.0% of Verrica Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Enanta Pharmaceuticals and Verrica Pharmaceuticals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enanta Pharmaceuticals	1	0	7	0	2.75
Verrica Pharmaceuticals	1	1	2	0	2.25

Enanta Pharmaceuticals presently has a consensus target price of $20.29, suggesting a potential upside of 56.04%. Verrica Pharmaceuticals has a consensus target price of $14.50, suggesting a potential upside of 175.67%. Given Verrica Pharmaceuticals’ higher possible upside, analysts clearly believe Verrica Pharmaceuticals is more favorable than Enanta Pharmaceuticals.

Summary

Enanta Pharmaceuticals beats Verrica Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

About Enanta Pharmaceuticals

Enanta Pharmaceuticals, Inc., a biotechnology company, discovers and develops small molecule drugs for the treatment of viral infections and liver diseases. Its product pipeline comprises EDP-514, which is in phase 1b clinical development for the treatment of chronic infection with hepatitis B virus or HBV; EDP-938 and EDP-323, which is in phase II clinical development for the treatment of respiratory syncytial virus; EDP-235, which is in phase II clinical development for the treatment of human coronaviruses; and Glecaprevir, which is in the market for the treatment of chronic infection with hepatitis C virus or HCV. The company has a collaborative development and license agreement with Abbott Laboratories to develop, manufacture, and commercialize HCV NS3 and NS3/4A protease inhibitor compounds, including paritaprevir and glecaprevir. Enanta Pharmaceuticals, Inc. was incorporated in 1995 and is headquartered in Watertown, Massachusetts.

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.