Generation Bio (NASDAQ:GBIO – Get Free Report) and HCW Biologics (NASDAQ:HCWB – Get Free Report) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.
Risk and Volatility
Generation Bio has a beta of 2.82, suggesting that its stock price is 182% more volatile than the S&P 500. Comparatively, HCW Biologics has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.
Profitability
This table compares Generation Bio and HCW Biologics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Generation Bio | -782.86% | -104.85% | -49.54% |
| HCW Biologics | -1,067.82% | -2,516.84% | -132.95% |
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Generation Bio | $5.90 million | 17.21 | -$126.61 million | ($2.19) | -0.69 |
| HCW Biologics | $2.84 million | 6.29 | -$24.99 million | ($1.00) | -0.47 |
HCW Biologics has lower revenue, but higher earnings than Generation Bio. Generation Bio is trading at a lower price-to-earnings ratio than HCW Biologics, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
95.2% of Generation Bio shares are held by institutional investors. Comparatively, 3.0% of HCW Biologics shares are held by institutional investors. 21.1% of Generation Bio shares are held by insiders. Comparatively, 49.9% of HCW Biologics shares are held by 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.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Generation Bio and HCW Biologics, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Generation Bio | 0 | 0 | 2 | 0 | 3.00 |
| HCW Biologics | 0 | 0 | 0 | 0 | 0.00 |
Generation Bio currently has a consensus price target of $7.50, indicating a potential upside of 393.42%. Given Generation Bio’s stronger consensus rating and higher probable upside, equities analysts clearly believe Generation Bio is more favorable than HCW Biologics.
Summary
Generation Bio beats HCW Biologics on 10 of the 14 factors compared between the two stocks.
About Generation Bio
Generation Bio Co. develops non-viral genetic medicines for the treatment of rare and prevalent diseases. The company develops cell-targeted lipid nanoparticle (ctLNP) platform, a modular delivery system for nucleic acids to avoid off-target clearance by the liver and spleen that enables ctLNPs to persist in systemic circulation, which allows for highly selective and potent ligand-driven targeting to specific tissues and cell types; and novel immune-quiet DNA (iqDNA) to enable long-lasting high levels of gene expression from non-integrating episomes and avoids innate immune sensors that have long prevented DNA from use in non-viral systems. It uses its platform for developing a portfolio of programs for treating cancer, autoimmune, hematologic disorders, prioritizing sickle cell, beta-thalassemia, and hemophilia A diseases, as well as for other tissues and cell types, including retina, skeletal muscle, and central nervous system. The company was formerly known as Torus Therapeutics, Inc. and changed its name to Generation Bio Co. in November 2017. Generation Bio Co. was incorporated in 2016 and is headquartered in Cambridge, Massachusetts.
About HCW Biologics
HCW Biologics Inc., a clinical-stage biopharmaceutical company, focuses on discovering and developing novel immunotherapies for chronic, low-grade inflammation, and age-related diseases in the United States. The company's lead products include HCW9218, which is in Phase 1 clinical chemo-refractory/chemo-resistant solid tumors with pancreatic, ovarian, breast, prostate, and colorectal cancers, as well as Phase 2 clinical trial with metastatic advanced stage ovarian cancer patients; and HCW9302 for autoimmune and proinflammatory diseases, such as alopecia areata diseases. It also develops HCW9201, a cell-based therapy that is in Phase I clinical trials for the treatment of patients with relapsed/refractory acute myelogenous leukemia; and HCW9206, an injectable immunotherapeutic to use as adjuvant for adoptive cell therapy in cancer treatment. HCW Biologics Inc. was incorporated in 2018 and is headquartered in Miramar, Florida.
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