Organovo Holdings (NASDAQ: ONVO) and Mesoblast Limited (NASDAQ:MESO) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Valuation and Earnings

This table compares Organovo Holdings and Mesoblast Limited’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Organovo Holdings N/A N/A N/A ($0.39) -5.56
Mesoblast Limited $2.41 million 212.00 -$87.03 million ($0.96) -6.13

Organovo Holdings has higher revenue, but lower earnings than Mesoblast Limited. Mesoblast Limited is trading at a lower price-to-earnings ratio than Organovo Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for Organovo Holdings and Mesoblast Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Organovo Holdings 0 0 4 0 3.00
Mesoblast Limited 0 2 4 0 2.67

Organovo Holdings presently has a consensus price target of $6.94, indicating a potential upside of 219.70%. Mesoblast Limited has a consensus price target of $14.25, indicating a potential upside of 142.23%. Given Organovo Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe Organovo Holdings is more favorable than Mesoblast Limited.

Profitability

This table compares Organovo Holdings and Mesoblast Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Organovo Holdings -918.97% -65.49% -60.15%
Mesoblast Limited -3,184.70% -14.79% -11.55%

Volatility and Risk

Organovo Holdings has a beta of 2.98, meaning that its share price is 198% more volatile than the S&P 500. Comparatively, Mesoblast Limited has a beta of 2.78, meaning that its share price is 178% more volatile than the S&P 500.

Institutional and Insider Ownership

23.9% of Organovo Holdings shares are owned by institutional investors. Comparatively, 3.0% of Mesoblast Limited shares are owned by institutional investors. 10.2% of Organovo Holdings shares are owned by company insiders. Comparatively, 18.8% of Mesoblast Limited shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Organovo Holdings beats Mesoblast Limited on 6 of the 10 factors compared between the two stocks.

Organovo Holdings Company Profile

Organovo Holdings, Inc. is an early commercial-stage company focused on developing and commercializing functional human tissues. The Company focuses on the generation of three-dimensional (3D) human tissues, by utilizing its platform technology to create human tissue constructs in 3D. It is focused on development of products, including 3D human tissues used for the preclinical assessment of drug effects, including applications in predictive toxicology, absorption, distribution, metabolism, excretion (ADME), and drug metabolism and pharmacokinetics (DMPK); customized human tissues as living, dynamic models of human biology or disease, for use in drug discovery and development, and three-dimensional human tissues for clinical applications, such as blood vessels for bypass grafting, nerve grafts for nerve damage repair and functional tissue patches for the repair or replacement of damaged tissues and organs.

Mesoblast Limited Company Profile

Mesoblast Limited is engaged in developing cell-based medicines. The Company has leveraged its technology platform, which is based on specialized cells known as mesenchymal lineage adult stem cells, to establish a portfolio of late-stage product candidates. Its allogeneic, off-the-shelf cell product candidates target advanced stages of diseases with high, unmet medical needs, including cardiovascular conditions, orthopedic disorders, immunologic and inflammatory disorders and oncologic/hematologic conditions.

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