WAVE Life Sciences (NASDAQ: WVE) and Editas Medicine (NASDAQ:EDIT) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitabiliy, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares WAVE Life Sciences and Editas Medicine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WAVE Life Sciences -3,172.14% -48.16% -39.94%
Editas Medicine -1,864.00% -63.29% -39.62%

Insider and Institutional Ownership

56.8% of WAVE Life Sciences shares are held by institutional investors. Comparatively, 67.9% of Editas Medicine shares are held by institutional investors. 53.0% of WAVE Life Sciences shares are held by 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.

Earnings & Valuation

This table compares WAVE Life Sciences and Editas Medicine’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
WAVE Life Sciences $2.16 million 257.92 -$66.34 million ($2.94) -6.84
Editas Medicine $5.93 million 117.17 -$108.33 million ($3.08) -5.54

WAVE Life Sciences has higher revenue, but lower earnings than Editas Medicine. WAVE Life Sciences is trading at a lower price-to-earnings ratio than Editas Medicine, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for WAVE Life Sciences and Editas Medicine, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WAVE Life Sciences 0 0 4 0 3.00
Editas Medicine 0 4 3 0 2.43

WAVE Life Sciences presently has a consensus price target of $42.00, indicating a potential upside of 108.96%. Editas Medicine has a consensus price target of $28.00, indicating a potential upside of 64.13%. Given WAVE Life Sciences’ stronger consensus rating and higher possible upside, analysts plainly believe WAVE Life Sciences is more favorable than Editas Medicine.

Summary

WAVE Life Sciences beats Editas Medicine on 8 of the 12 factors compared between the two stocks.

About WAVE Life Sciences

WAVE Life Sciences Ltd. is a genetic medicines company. The Company, through its synthetic chemistry drug development platform, designs, develops and commercializes a pipeline of nucleic acid therapeutic candidates for genetically defined diseases. The Company is engaged in developing oligonucleotides that target genetic defects to either reduce the expression of disease-promoting proteins or transform the production of dysfunctional mutant proteins into the production of functional proteins. The nucleic acid therapeutics, which the Company is developing are stereopure. A stereopure oligonucleotide includes molecules with atoms arranged in three-dimensional orientations at each linkage. The Company has three programs in Huntington’s disease (HD) and Duchenne Muscular Dystrophy (DMD), and three additional development candidates.

About Editas Medicine

Editas Medicine, Inc. is a genome editing company. It is engaged in treating patients with genetically defined diseases by correcting their disease-causing genes. It operates through developing and commercializing genome editing technology segment. It is developing a genome editing platform based on clustered, regularly interspaced short palindromic repeats (CRISPR) technology. CRISPR uses a protein-ribonucleic acid (RNA) complex composed of an enzyme, including either CRISPR associated protein 9 (Cas9) or CRISPR from Prevotella and Francisella 1 (Cpf1), bound to a guide RNA molecule designed to recognize a particular deoxyribonucleic acid (DNA) sequence. Its platform consists of four components: nuclease engineering, delivery, control and specificity, and directed editing. Its programs include Eye Diseases, Engineered T Cell Therapies for Immuno-Oncology and additional research programs. It is developing a genome editing therapeutic for Leber Congenital Amaurosis type 10 (LCA10).

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