Financial Analysis: Verastem (NASDAQ:VSTM) and Kaya (OTCMKTS:KAYS)

Verastem (NASDAQ:VSTM) and Kaya (OTCMKTS:KAYS) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

88.4% of Verastem shares are held by institutional investors. 2.2% of Verastem shares are held by company insiders. Comparatively, 23.5% of Kaya shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Verastem and Kaya”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verastem	$2.60 million	43.49	-$87.37 million	($4.40)	-0.64
Kaya	$200,000.00	3.31	$1.61 million	($0.03)	-1.50

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Verastem and Kaya, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verastem	0	0	6	0	3.00
Kaya	0	0	0	0	N/A

Verastem currently has a consensus price target of $14.83, indicating a potential upside of 427.88%. Given Verastem’s higher possible upside, research analysts plainly believe Verastem is more favorable than Kaya.

Volatility & Risk

Verastem has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500. Comparatively, Kaya has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

Profitability

This table compares Verastem and Kaya’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verastem	N/A	-194.05%	-64.48%
Kaya	260.23%	-9.79%	652.87%

Summary

Kaya beats Verastem on 7 of the 13 factors compared between the two stocks.

About Verastem

Verastem, Inc., a development-stage biopharmaceutical company, focuses on developing and commercializing drugs for the treatment of cancer in the United States. Its product candidates are Avutometinib, an orally available small molecule RAF/MEK clamp that inhibits the ras sarcoma RAF/MEK, ERK mitogen activated pathway kinase pathway which is involved in cell proliferation, migration, transformation, and survival of tumor cells; and Defactinib, an oral small molecule inhibitor of FAK and proline-rich tyrosine kinase for various solid tumors. The company is involved in clinical studies, including RAMP 301, a randomized global confirmatory trial to evaluate the combination of Avutometinib and Defactinib for the treatment of patients with recurrent low-grade serous ovarian cancer; RAMP 201, an adaptive two-part multicenter, parallel cohort, randomized open label trial to evaluate the efficacy and safety of Avutometinib and in combination with Defactinib; and FRAME, an investigation of Avutometinib and Defactinib in patients with KRAS mutant cancers and subsequent analyses; and RAMP 204 and 205. It has license agreements with Chugai Pharmaceutical Co., Ltd. for the development, commercialization, and manufacture of products containing Avutometinib; and Pfizer Inc. to research, develop, manufacture, and commercialize products containing Pfizer's inhibitors of FAK for therapeutic, diagnostic, and prophylactic uses in humans. In addition, it has a clinical collaboration agreement with Amgen, Inc. to evaluate the combination of Avutometinib with Amgen's KRAS-G12C inhibitor LUMAKRAS which in Phase 1/2 trial entitled RAMP 203; and a discovery and development collaboration with GenFleet Therapeutics to advance new programs targeting RAS pathway-driven cancers. Verastem, Inc. was incorporated in 2010 and is headquartered in Needham, Massachusetts.

About Kaya

Kaya Holdings, Inc., a vertically integrated legal cannabis enterprise, engages in the operation of psychedelic treatment clinics and medical cannabis dispensaries primarily in the United States. It offers a range of cannabis products, including flower, oils, vape cartridges and cannabis infused confections, baked goods, and beverages. The company also operates retail outlets under the Kaya Shack brand name, as well as offers strain specific cannabis cigarettes under the Kaya Buddies name, and strains of cannabis under the Kaya Farms name. In addition, it is involved in the development of a psychedelic treatment center under The Sacred Mushroom name, that provides its guests access to psilocybin treatments, located in Portland, Oregon. The company was formerly known as Alternative Fuels America, Inc. and changed its name to Kaya Holdings, Inc. in April 2015. Kaya Holdings, Inc. is headquartered in Fort Lauderdale, Florida.