Vericel Corporation (NASDAQ: VCEL) and VIVUS (NASDAQ:VVUS) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Risk and Volatility

Vericel Corporation has a beta of 3.16, meaning that its share price is 216% more volatile than the S&P 500. Comparatively, VIVUS has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Profitability

This table compares Vericel Corporation and VIVUS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vericel Corporation -50.27% N/A -59.46%
VIVUS 24.72% 3,746.48% 11.02%

Valuation and Earnings

This table compares Vericel Corporation and VIVUS’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vericel Corporation $53.77 million 2.81 -$20.03 million ($1.10) -4.18
VIVUS $133.40 million 0.73 $67.14 million $0.31 2.98

VIVUS has higher revenue and earnings than Vericel Corporation. Vericel Corporation is trading at a lower price-to-earnings ratio than VIVUS, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Vericel Corporation and VIVUS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vericel Corporation 0 0 3 0 3.00
VIVUS 0 0 0 0 N/A

Vericel Corporation presently has a consensus target price of $6.33, indicating a potential upside of 37.68%. Given Vericel Corporation’s higher possible upside, equities analysts clearly believe Vericel Corporation is more favorable than VIVUS.

Institutional & Insider Ownership

33.8% of Vericel Corporation shares are owned by institutional investors. Comparatively, 35.7% of VIVUS shares are owned by institutional investors. 3.3% of Vericel Corporation shares are owned by insiders. Comparatively, 4.4% of VIVUS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

VIVUS beats Vericel Corporation on 8 of the 12 factors compared between the two stocks.

Vericel Corporation Company Profile

Vericel Corporation, formerly Aastrom Biosciences, Inc., is a commercial-stage biopharmaceutical company dedicated to the identification, development and commercialization of therapies that enable the body to repair and regenerate damaged tissues and organs to restore normal structure and function. The Company operates through the research, product development, manufacture and distribution of patient-specific, expanded cellular therapies for use in the treatment of specific diseases segment. Its autologous cell therapy products include Carticel (autologous cultured chondrocytes), which is an autologous chondrocyte implant for the treatment of cartilage defects in the knee, and Epicel (cultured epidermal autografts), which is a permanent skin replacement for the treatment of patients with deep-dermal or full-thickness burns. The Company is developing MACI, which is a third-generation autologous chondrocyte implant and ixmyelocel-T, which is a patient-specific multicellular therapy.

VIVUS Company Profile

VIVUS, Inc. is a biopharmaceutical company. The Company operates in the development and commercialization of therapeutic products segment. It provides over two therapies approved by the Food and Drug Association (FDA), which include Qsymia (phentermine and topiramate extended-release) for chronic weight management and STENDRA (avanafil) for erectile dysfunction (ED). The Company has completed the Phase II studies of Qsymia for the indication of Obstructive Sleep Apnea (OSA) and diabetes. Its Qsymia is available in over 40,000 certified retail pharmacies across the country. Its STENDRA is also approved by the European Commission (EC), under the name, SPEDRA, for the treatment of ED in the Europe. The United States Food and Drug Association approved a Supplemental New Drug Application (sNDA) for STENDRA. STENDRA is indicated to be taken approximately 15 minutes before sexual activity.

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