Head to Head Survey: Veracyte (NASDAQ:VCYT) and Thermo Fisher Scientific (NYSE:TMO)

Thermo Fisher Scientific (NYSE:TMO) and Veracyte (NASDAQ:VCYT) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Thermo Fisher Scientific and Veracyte, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Thermo Fisher Scientific	0	3	19	1	2.91
Veracyte	1	2	5	1	2.67

Thermo Fisher Scientific presently has a consensus price target of $625.47, suggesting a potential upside of 3.09%. Veracyte has a consensus price target of $46.14, suggesting a potential upside of 7.18%. Given Veracyte’s higher probable upside, analysts clearly believe Veracyte is more favorable than Thermo Fisher Scientific.

Earnings & Valuation

This table compares Thermo Fisher Scientific and Veracyte”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Thermo Fisher Scientific	$42.88 billion	5.32	$6.34 billion	$17.31	35.05
Veracyte	$445.76 million	7.63	$24.14 million	$0.38	113.29

Thermo Fisher Scientific has higher revenue and earnings than Veracyte. Thermo Fisher Scientific is trading at a lower price-to-earnings ratio than Veracyte, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

89.2% of Thermo Fisher Scientific shares are held by institutional investors. 0.3% of Thermo Fisher Scientific shares are held by insiders. Comparatively, 1.4% of Veracyte shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Thermo Fisher Scientific and Veracyte’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Thermo Fisher Scientific	15.02%	16.97%	8.49%
Veracyte	6.12%	7.23%	6.58%

Risk & Volatility

Thermo Fisher Scientific has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Veracyte has a beta of 1.88, suggesting that its share price is 88% more volatile than the S&P 500.

Summary

Thermo Fisher Scientific beats Veracyte on 9 of the 14 factors compared between the two stocks.

About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. provides life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services in the North America, Europe, Asia-Pacific, and internationally. The company's Life Sciences Solutions segment offers reagents, instruments, and consumables for biological and medical research, discovery, and production of drugs and vaccines, as well as diagnosis of infections and diseases; and solutions include biosciences, genetic sciences, and bio production to pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets. Its Analytical Instruments segment provides instruments, consumables, software, and services for pharmaceutical, biotechnology, academic, government, environmental, and other research and industrial markets, as well as clinical laboratories. The company's Specialty Diagnostics segment offers liquid, ready-to-use, and lyophilized immunodiagnostic reagent kits, as well as calibrators, controls, protein detection assays, and instruments; immunodiagnostics develops, manufactures and markets complete bloodtest systems to support the clinical diagnosis and monitoring of allergy, asthma and autoimmune diseases; dehydrated and prepared culture media, collection and transport systems, instrumentation, and consumables; human leukocyte antigen typing and testing for organ transplant market; and healthcare products. Its Laboratory Products and Biopharma Services segment provides laboratory products, research and safety market channel, and pharma services and clinical research. It offers products and services through a direct sales force, customer-service professionals, electronic commerce, and third-party distributors under Thermo Scientific; Applied Biosystems; Invitrogen; Fisher Scientific; Unity Lab Services; and Patheon and PPD. Thermo Fisher Scientific Inc. was founded in 1956 and is headquartered in Waltham, Massachusetts.

About Veracyte

Veracyte, Inc. engages in the research, development and commercialization of diagnostic products. The firm’s portfolio includes Afirma, Percepta, and Envisia. It intends to treat thyroid cancer, improve lung cancer screening, and clarify the diagnosis of idiopathic pulmonary fibrosis. The company was founded by Bonnie H. Anderson and Y. Douglas Dolginow on August 15, 2006 and is headquartered in South San Francisco, CA.