Contrasting Compass Pathways (NASDAQ:CMPS) and Elevance Health (NYSE:ELV)

Elevance Health (NYSE:ELV) and Compass Pathways (NASDAQ:CMPS) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Elevance Health and Compass Pathways’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Elevance Health	2.84%	15.59%	5.60%
Compass Pathways	N/A	-192.95%	-61.31%

Analyst Ratings

This is a summary of recent ratings and price targets for Elevance Health and Compass Pathways, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elevance Health	1	9	12	0	2.50
Compass Pathways	1	1	6	1	2.78

Elevance Health presently has a consensus price target of $387.40, suggesting a potential upside of 32.17%. Compass Pathways has a consensus price target of $21.63, suggesting a potential upside of 291.76%. Given Compass Pathways’ stronger consensus rating and higher probable upside, analysts plainly believe Compass Pathways is more favorable than Elevance Health.

Insider & Institutional Ownership

89.2% of Elevance Health shares are held by institutional investors. Comparatively, 46.2% of Compass Pathways shares are held by institutional investors. 0.3% of Elevance Health shares are held by company insiders. Comparatively, 3.9% of Compass Pathways shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Elevance Health and Compass Pathways”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elevance Health	$199.13 billion	0.32	$5.66 billion	$25.12	11.67
Compass Pathways	N/A	N/A	-$287.86 million	($3.09)	-1.79

Elevance Health has higher revenue and earnings than Compass Pathways. Compass Pathways is trading at a lower price-to-earnings ratio than Elevance Health, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Elevance Health has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Compass Pathways has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500.

Summary

Elevance Health beats Compass Pathways on 9 of the 14 factors compared between the two stocks.

About Elevance Health

Elevance Health, Inc., together with its subsidiaries, operates as a health benefits company in the United States. The company operates through four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other. It offers a variety of health plans and services to program members; health products; an array of fee-based administrative managed care services; and specialty and other insurance products and services, such as stop loss, dental, vision, life, disability, and supplemental health insurance benefits. The company operates in the pharmacy services business; and markets and offers pharmacy services, including pharmacy benefit management, as well as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database, and member services. In addition, it provides healthcare-related services and capabilities, including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services, subrogation services, and health and wellness programs, as well as services related to data management, information technology, and business operations. Further, the company is involved in the National Government Services business. The company provides its services under the Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon brand names. The company was formerly known as Anthem, Inc. and changed its name to Elevance Health, Inc. in June 2022. Elevance Health, Inc. was incorporated in 2001 and is headquartered in Indianapolis, Indiana.

About Compass Pathways

Compass Pathways plc operates as a mental health care company in the United Kingdom and the United States. It develops COMP360, a psilocybin therapy that is in Phase III clinical trials for the treatment of treatment-resistant depression; and is in Phase II clinical trials for the treatment of post-traumatic stress disorder and anorexia nervosa. The company was formerly known as COMPASS Rx Limited and changed its name to Compass Pathways plc in August 2020. Compass Pathways plc was incorporated in 2020 and is headquartered in London, the United Kingdom.