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

Institutional & Insider Ownership

69.4% of Editas Medicine shares are owned by institutional investors. Comparatively, 43.1% of Sutro Biopharma shares are owned by institutional investors. 5.2% of Editas Medicine shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Editas Medicine and Sutro Biopharma, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Editas Medicine 0 2 5 0 2.71
Sutro Biopharma 0 0 4 0 3.00

Editas Medicine presently has a consensus price target of $40.25, indicating a potential upside of 78.02%. Sutro Biopharma has a consensus price target of $24.33, indicating a potential upside of 126.57%. Given Sutro Biopharma’s stronger consensus rating and higher possible upside, analysts plainly believe Sutro Biopharma is more favorable than Editas Medicine.

Profitability

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

Net Margins Return on Equity Return on Assets
Editas Medicine -344.28% -46.82% -27.39%
Sutro Biopharma N/A N/A N/A

Earnings & Valuation

This table compares Editas Medicine and Sutro Biopharma’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Editas Medicine $31.94 million 34.75 -$109.95 million ($2.33) -9.70
Sutro Biopharma $51.74 million 4.74 -$19.68 million N/A N/A

Sutro Biopharma has higher revenue and earnings than Editas Medicine.

Summary

Sutro Biopharma beats Editas Medicine on 7 of the 11 factors compared between the two stocks.

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.

About Sutro Biopharma

Sutro Biopharma, Inc. operates as clinical stage drug discovery, development, and manufacturing company. It focuses on creating protein therapeutics for cancer and autoimmune disorders through integrated cell-free protein synthesis platform, XpressCF. The company's product candidates include STRO-001, an antibody-drug conjugate (ADC) directed against the cancer target CD74 for multiple myeloma and non-Hodgkin lymphoma; and STRO-002, an ADC directed against folate receptor-alpha for patients with ovarian and endometrial cancers. It has collaboration and license agreement with Celgene Corporation to discover and develop bispecific antibodies and/or ADCs focused primarily on the field of immuno-oncology. The company was formerly known as Fundamental Applied Biology, Inc. Sutro Biopharma, Inc. was incorporated in 2003 and is headquartered in South San Francisco, California.

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