TRACON Pharmaceuticals (NASDAQ: EDIT) and Editas Medicine (NASDAQ:EDIT) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a summary of current ratings for TRACON Pharmaceuticals and Editas Medicine, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TRACON Pharmaceuticals 0 0 1 0 3.00
Editas Medicine 1 3 5 0 2.44

TRACON Pharmaceuticals currently has a consensus price target of $8.00, indicating a potential upside of 255.56%. Editas Medicine has a consensus price target of $48.67, indicating a potential upside of 50.16%. Given TRACON Pharmaceuticals’ stronger consensus rating and higher probable upside, research analysts plainly believe TRACON Pharmaceuticals is more favorable than Editas Medicine.

Earnings and Valuation

This table compares TRACON Pharmaceuticals and Editas Medicine’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TRACON Pharmaceuticals $8.76 million 7.66 -$19.10 million ($1.14) -1.97
Editas Medicine $13.73 million 112.55 -$120.32 million ($2.98) -10.88

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

Profitability

This table compares TRACON Pharmaceuticals and Editas Medicine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TRACON Pharmaceuticals N/A -79.54% -48.90%
Editas Medicine -623.35% -61.27% -35.09%

Volatility and Risk

TRACON Pharmaceuticals has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, Editas Medicine has a beta of 3.36, meaning that its share price is 236% more volatile than the S&P 500.

Insider and Institutional Ownership

56.4% of TRACON Pharmaceuticals shares are held by institutional investors. Comparatively, 67.2% of Editas Medicine shares are held by institutional investors. 23.3% of TRACON Pharmaceuticals shares are held by company insiders. Comparatively, 5.2% of Editas Medicine shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Editas Medicine beats TRACON Pharmaceuticals on 7 of the 13 factors compared between the two stocks.

About TRACON Pharmaceuticals

TRACON Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, focuses on the development and commercialization of therapeutics for cancer, wet age-related macular degeneration (AMD), and fibrotic diseases. Its lead product candidate is TRC105, an endoglin antibody, which is in Phase III clinical trials for angiosarcoma; randomized Phase II clinical trials for renal cell carcinoma; Phase II clinical trials for gestational trophoblastic neoplasia; Phase I/II clinical trials for hepatocellular carcinoma; Phase I clinical trial for lung cancer; Phase I/II clinical trials for breast cancer; Phase II clinical trials for prostate cancer; and randomized Phase II clinical trials for wet AMD. The company's other product candidates comprise TRC102, a small molecule that is in Phase II clinical trials for mesothelioma, Phase II clinical trials for glioblastoma, Phase I clinical trial for solid tumors, Phase I/II clinical trials for solid tumors and lymphomas, as well as Phase I clinical trial for lung cancer; and TRC253, a small molecule high affinity competitive inhibitor of wild type androgen receptor (AR) and multiple AR mutant receptors that is in Phase I/II clinical trials for the treatment prostate cancer. Its preclinical development product includes TRC694, an orally bioavailable inhibitor of NF-kB inducing kinase for the treatment of patients with hematologic malignancies, including myeloma. The company has a license agreement with Ambrx, Inc. for the development and commercialization of TRC105; and Santen Pharmaceutical Co., Ltd to develop, manufacture, and commercialize DE-122 for the ophthalmology indications of TRC105, as well as strategic licensing collaboration with Janssen Pharmaceutica N.V. to develop TRC253 and TRC694. The company was formerly known as Lexington Pharmaceuticals, Inc. and changed its name to TRACON Pharmaceuticals, Inc. in March 2005. TRACON Pharmaceuticals, Inc. was founded in 2004 and is headquartered in San Diego, California.

About Editas Medicine

Editas Medicine, Inc. operates as a genome editing company. It focuses on treating patients with genetically defined diseases by correcting their disease causing genes. The company develops a proprietary genome editing platform based on CRISPR technology to target genetically defined diseases with an initial focus on debilitating illnesses where there are no approved treatments. It develops EDIT-101 for Leber Congenital Amaurosis type 10, a genetic form of vision loss that leads to blindness in childhood. The company also develops other therapies for eye diseases, such as Herpes Simplex Virus 1 that causes lifelong infections primarily leading to ocular and oral disease; and Usher Syndrome 2A, which is a form of retinitis pigmentosa that also includes hearing loss. In addition, it develops hematopoietic stem cells for treating sickle cell disease and beta thalassemia. Editas Medicine, Inc. has a collaboration and license agreement with Juno Therapeutics, Inc. for the research and development of engineered T cells with chimeric antigen receptors and T cell receptors; and strategic alliance and option agreement with Allergan Pharmaceuticals International Limited for the research and development of medicines for ocular diseases. The company was formerly known as Gengine, Inc. and changed its name to Editas Medicine Inc. in November 2013. Editas Medicine, Inc. was founded in 2013 and is based in Cambridge, Massachusetts.

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