Financial Analysis: Mirati Therapeutics (NASDAQ:MRTX) & Evelo Biosciences (NASDAQ:EVLO)

Mirati Therapeutics (NASDAQ:MRTX) and Evelo Biosciences (NASDAQ:EVLO) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Profitability

This table compares Mirati Therapeutics and Evelo Biosciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mirati Therapeutics -2,698.66% -52.99% -48.83%
Evelo Biosciences N/A -57.27% -48.07%

Insider and Institutional Ownership

86.2% of Evelo Biosciences shares are owned by institutional investors. 4.7% of Mirati Therapeutics shares are owned by company insiders. Comparatively, 59.1% of Evelo Biosciences shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Mirati Therapeutics has a beta of 2.05, meaning that its share price is 105% more volatile than the S&P 500. Comparatively, Evelo Biosciences has a beta of -0.13, meaning that its share price is 113% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Mirati Therapeutics and Evelo Biosciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mirati Therapeutics 1 3 12 0 2.69
Evelo Biosciences 0 1 3 0 2.75

Mirati Therapeutics currently has a consensus target price of $107.21, suggesting a potential upside of 9.40%. Evelo Biosciences has a consensus target price of $17.67, suggesting a potential upside of 164.08%. Given Evelo Biosciences’ stronger consensus rating and higher possible upside, analysts plainly believe Evelo Biosciences is more favorable than Mirati Therapeutics.

Earnings and Valuation

This table compares Mirati Therapeutics and Evelo Biosciences’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mirati Therapeutics $12.93 million 298.90 -$98.42 million ($3.19) -30.72
Evelo Biosciences N/A N/A -$56.94 million ($2.78) -2.41

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

Summary

Evelo Biosciences beats Mirati Therapeutics on 9 of the 13 factors compared between the two stocks.

About Mirati Therapeutics

Mirati Therapeutics, Inc., a clinical-stage oncology company, develops product candidates to address the genetic and immunological promoters of cancer in the United States. The company is involved in developing sitravatinib, a spectrum-selective kinase inhibitor, which is in Phase II clinical for the treatment of non-small cell lung cancer (NCSLC); and in Phase Ib clinical trial to treat NCSLC patients with Casitas B-lineage Lymphoma genetic alterations, as well as KRAS G12C inhibitor program for NSCLC adenocarcinoma patients, colorectal cancer patients, and other cancers. It also develops mocetinostat, an orally investigational selective Class I and IV histone deacetylase inhibitor that has completed Phase II clinical trial in combination with durvalumab for the treatment of patients with NSCLC. The company has a collaboration and license agreement with BeiGene, Ltd. to develop, manufacture, and commercialize sitravatinib. Mirati Therapeutics, Inc. was founded in 1995 and is headquartered in San Diego, California.

About Evelo Biosciences

Evelo Biosciences, Inc., a biotechnology company, focuses on the development of monocolonal microbials for the treatment of inflammatory diseases and cancer. It is involved in developing EDP1066 and EDP1815, which are in Phase 1b placebo-controlled dose-escalating safety and tolerability clinical study for the treatment of atopic dermatitis, asthma, psoriatic arthritis, rheumatoid arthritis, and inflammatory bowel diseases. The company is also involved in developing EDP150, a monoclonal microbial candidate, which is in Phase 1/2 clinical study for the treatment of colorectal cancer, triple-negative breast cancer, and melanoma, as well as patients who have relapsed on prior PD-1/L1 inhibitor treatment across multiple tumor types. Evelo Biosciences, Inc. was founded in 2014 and is headquartered in Cambridge, Massachusetts.

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