Reviewing Arbutus Biopharma (NASDAQ:ABUS) and Prelude Therapeutics (NASDAQ:PRLD)

Prelude Therapeutics (NASDAQ:PRLD) and Arbutus Biopharma (NASDAQ:ABUS) are both small-cap healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Profitability

This table compares Prelude Therapeutics and Arbutus Biopharma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prelude Therapeutics	N/A	-75.35%	-44.39%
Arbutus Biopharma	84.22%	90.98%	82.34%

Insider & Institutional Ownership

79.7% of Prelude Therapeutics shares are held by institutional investors. Comparatively, 43.8% of Arbutus Biopharma shares are held by institutional investors. 49.2% of Prelude Therapeutics shares are held by insiders. Comparatively, 19.9% of Arbutus Biopharma shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Prelude Therapeutics and Arbutus Biopharma, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prelude Therapeutics	1	1	5	0	2.57
Arbutus Biopharma	0	1	1	0	2.50

Prelude Therapeutics presently has a consensus price target of $8.75, indicating a potential upside of 168.40%. Arbutus Biopharma has a consensus price target of $5.00, indicating a potential upside of 18.48%. Given Prelude Therapeutics’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Prelude Therapeutics is more favorable than Arbutus Biopharma.

Valuation & Earnings

This table compares Prelude Therapeutics and Arbutus Biopharma”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prelude Therapeutics	$12.14 million	21.43	-$99.50 million	($0.73)	-4.47
Arbutus Biopharma	$14.08 million	59.38	-$33.50 million	$0.79	5.34

Arbutus Biopharma has higher revenue and earnings than Prelude Therapeutics. Prelude Therapeutics is trading at a lower price-to-earnings ratio than Arbutus Biopharma, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Prelude Therapeutics has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Arbutus Biopharma has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Summary

Arbutus Biopharma beats Prelude Therapeutics on 8 of the 14 factors compared between the two stocks.

About Prelude Therapeutics

Prelude Therapeutics Incorporated, a clinical-stage biopharmaceutical company, focuses on the discovery and development of novel precision cancer medicines to underserved patients. It is developing PRT1419, a myeloid cell leukemia-1 inhibitor, which is in Phase 1 clinical trial for the treatment of selected relapsed/refractory myeloid or B-cell malignancies; PRT2527, a cyclin-dependent kinase, which is in Phase 1 clinical trial for the treatment of advanced solid tumors; PRT3645, a cyclin-dependent kinase 4/6 inhibitor, which is in Phase 1 clinical trial for the treatment of advanced and metastatic solid tumors; and PRT3879, a SMARCA2 selective protein degrader, which is in Phase 2/3 clinical trial for the treatment of advanced and metastatic solid tumors with loss of SMARCA4 due to truncating mutation and/or deletion. The company's CDK9 program is a regulator of cancer-promoting transcriptional programs, including MCL1, MYC and MYB. Prelude Therapeutics Incorporated was incorporated in 2016 and is based in Wilmington, Delaware.

About Arbutus Biopharma

Arbutus Biopharma Corporation, a biopharmaceutical company, develops novel therapeutics for chronic Hepatitis B virus (HBV) infection in the United States. Its HBV product pipeline consists of imdusiran (AB-729), a proprietary subcutaneously-delivered RNAi therapeutic product candidate that suppresses all HBV antigens, including HBsAg expression. The company’s research and development programs include AB-101, an oral PD-L1 inhibitor to reawaken patients’ HBV-specific immune system; and small molecule antiviral medicines to treat coronaviruses, including COVID-19. It has licensing agreements with Gritstone Oncology, Inc; Alnylam Pharmaceuticals, Inc.; Qilu Pharmaceuticals Co, Ltd; Assembly Biosciences, Inc.; Acuitas Therapeutics, Inc.; and Antios Therapeutics, Inc. Arbutus Biopharma Corporation also has a clinical collaboration agreement with Barinthus Biotherapeutics plc to evaluate VTP-300. The company was formerly known as Tekmira Pharmaceuticals Corporation and changed its name to Arbutus Biopharma Corporation in July 2015. Arbutus Biopharma Corporation is headquartered in Warminster, Pennsylvania.