Critical Survey: Scilex (NASDAQ:SCLX) versus Compass Therapeutics (NASDAQ:CMPX)

Compass Therapeutics (NASDAQ:CMPX) and Scilex (NASDAQ:SCLX) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Compass Therapeutics and Scilex, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Therapeutics	0	0	8	1	3.11
Scilex	0	2	3	0	2.60

Compass Therapeutics currently has a consensus target price of $13.13, indicating a potential upside of 425.00%. Scilex has a consensus target price of $455.00, indicating a potential upside of 7,110.78%. Given Scilex’s higher possible upside, analysts plainly believe Scilex is more favorable than Compass Therapeutics.

Risk and Volatility

Compass Therapeutics has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500. Comparatively, Scilex has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Valuation and Earnings

This table compares Compass Therapeutics and Scilex”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Therapeutics	$850,000.00	406.71	-$42.49 million	($0.41)	-6.10
Scilex	$50.71 million	0.87	-$114.33 million	($29.02)	-0.22

Compass Therapeutics has higher earnings, but lower revenue than Scilex. Compass Therapeutics is trading at a lower price-to-earnings ratio than Scilex, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Compass Therapeutics and Scilex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Therapeutics	N/A	-32.37%	-30.67%
Scilex	-159.10%	N/A	-93.65%

Institutional & Insider Ownership

68.4% of Compass Therapeutics shares are owned by institutional investors. Comparatively, 69.7% of Scilex shares are owned by institutional investors. 29.8% of Compass Therapeutics shares are owned by company insiders. Comparatively, 7.9% of Scilex shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Compass Therapeutics beats Scilex on 11 of the 15 factors compared between the two stocks.

About Compass Therapeutics

Compass Therapeutics, Inc., a clinical-stage oncology-focused biopharmaceutical company, engages in developing antibody-based therapeutics to treat various human diseases in the United States. The company's lead product candidates include CTX-009, a bispecific antibody that blocks Delta-like ligand 4 a ligand of Notch-1, and vascular endothelial growth factor A signaling pathways, which are critical to angiogenesis and tumor vascularization; and CTX-471, an IgG4 monoclonal antibody that is an agonist of CD137, a key co-stimulatory receptor on immune cells. It also develops CTX-8371, a bispecific inhibitor that targets PD-1 and PD-L1 checkpoint inhibitor antibodies. The company was founded in 2014 and is headquartered in Boston, Massachusetts.

About Scilex

Scilex Holding Company focuses on acquiring, developing, and commercializing non-opioid pain management products for the treatment of acute and chronic pain. Its commercial products include ZTlido (lidocaine topical system) 1.8% (ZTlido), a prescription lidocaine topical product for the relief of neuropathic pain associated with postherpetic neuralgia (PHN), which is a form of post-shingles nerve pain; ELYXYB, a ready-to-use oral solution for the acute treatment of migraine with or without aura in adults; and GLOPERBA, a liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults. The company is also developing three product candidates, including SP-102 (10 mg dexamethasone sodium phosphate viscous gel) (SEMDEXA), a novel viscous gel formulation of a used corticosteroid for epidural injections, which has completed a Phase 3 study to treat lumbosacral radicular pain or sciatica; SP-103 (lidocaine topical system) 5.4% (SP-103), a formulation of ZTlido for the treatment of chronic neck pain and low back pain (LBP) that has completed a Phase 2 trial; and SP-104 (4.5 mg low-dose naltrexone hydrochloride delayed-release capsules) (SP-104), a novel low-dose delayed-release naltrexone hydrochloride, which has completed Phase 1 trials for the treatment of fibromyalgia. The company is headquartered in Palo Alto, California.