AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) and Vericel Corporation (NASDAQ:VCEL) are both Healthcare companies that recently hit new highs. The recent price action of these companies has left many investors wondering what actions to take. To determine if one is a better investment than the other, we will compare the two names across various metrics, including growth, profitability, risk, return, dividends, and valuation.
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) operates in the Biotechnology segment of the Healthcare sector. The company has grown sales at a -56.70% annual rate over the past five years, putting it in the low growth category. In terms of efficiency, AVEO has an asset turnover ratio of 0.23. This figure represents the amount of revenue a company generates per dollar of assets. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 486.80%, which is better than the Biotechnology industry average ROE.
Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is -1.09. The average investment recommendation for AVEO, taken from a group of Wall Street Analysts, is 2.00, or a buy.
Over the past three months, AVEO Pharmaceuticals, Inc. insiders have been net buyers, dumping a net of 0 shares. This implies that insiders have been feeling relatively bearish about the outlook for AVEO. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. AVEO has a beta of 1.21 and therefore an above average level of market volatility.
Vericel Corporation (NASDAQ:VCEL) operates in the Biotechnology segment of the Healthcare sector. VCEL has increased sales at a 396.60% CAGR over the past five years, and is considered a high growth stock. The company has a net profit margin of -45.10% and is less profitable than the average Biotechnology player. VCEL’s asset turnover ratio is 1.38 and the company has financial leverage of 1.25. VCEL’s return on equity of -316.70% is worse than the Biotechnology industry average.
The average analyst recommendation for VCEL is 1.50, or a buy.
Vericel Corporation insiders have sold a net of 0 shares during the past three months, which implies that the company’s top executives have been feeling bearish about the stock’s outlook. Finally, VCEL’s beta of 3.06 indicates that the stock has an above average level of market risk.
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) scores higher than Vericel Corporation (NASDAQ:VCEL) on 5 of the 13 measures compared between the two companies. AVEO has the better fundamentals, scoring higher on profitability, leverage and return metrics.