Critical Contrast: Editas Medicine (EDIT) & Sutro Biopharma (NASDAQ:STRO)

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Sutro Biopharma (NASDAQ:STRO) and Editas Medicine (NASDAQ:EDIT) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Earnings & Valuation

This table compares Sutro Biopharma and Editas Medicine’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sutro Biopharma $38.42 million 7.09 -$35.32 million ($6.13) -1.94
Editas Medicine $31.94 million 40.44 -$109.95 million ($2.33) -11.29

Sutro Biopharma has higher revenue and earnings than Editas Medicine. Editas Medicine is trading at a lower price-to-earnings ratio than Sutro Biopharma, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sutro Biopharma and Editas Medicine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sutro Biopharma N/A N/A N/A
Editas Medicine -344.28% -46.82% -27.39%

Insider and Institutional Ownership

47.2% of Sutro Biopharma shares are held by institutional investors. Comparatively, 70.2% of Editas Medicine shares are held by institutional investors. 5.2% of Editas Medicine shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Sutro Biopharma and Editas Medicine, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sutro Biopharma 0 0 4 0 3.00
Editas Medicine 0 2 6 0 2.75

Sutro Biopharma presently has a consensus price target of $24.33, indicating a potential upside of 104.65%. Editas Medicine has a consensus price target of $40.25, indicating a potential upside of 52.98%. Given Sutro Biopharma’s stronger consensus rating and higher possible upside, analysts plainly believe Sutro Biopharma is more favorable than Editas Medicine.

Summary

Sutro Biopharma beats Editas Medicine on 8 of the 13 factors compared between the two stocks.

About Sutro Biopharma

Sutro Biopharma, Inc. operates as clinical stage drug discovery, development, and manufacturing company. It focuses on creating protein therapeutics for cancer and autoimmune disorders through integrated cell-free protein synthesis platform, XpressCF. The company's product candidates include STRO-001, an antibody-drug conjugate (ADC) directed against the cancer target CD74 for multiple myeloma and non-Hodgkin lymphoma; and STRO-002, an ADC directed against folate receptor-alpha for patients with ovarian and endometrial cancers. It has collaboration and license agreement with Celgene Corporation to discover and develop bispecific antibodies and/or ADCs focused primarily on the field of immuno-oncology. The company was formerly known as Fundamental Applied Biology, Inc. Sutro Biopharma, Inc. was incorporated in 2003 and is headquartered in South San Francisco, California.

About Editas Medicine

Editas Medicine, Inc. operates as a genome editing company. It focuses on treating patients with genetically defined diseases by correcting their disease causing genes. The company develops a proprietary genome editing platform based on CRISPR technology to target genetically defined diseases with an initial focus on debilitating illnesses where there are no approved treatments. It develops EDIT-101 for Leber Congenital Amaurosis type 10, a genetic form of vision loss that leads to blindness in childhood. The company also develops other therapies for eye diseases, such as Herpes Simplex Virus 1 that causes lifelong infections primarily leading to ocular and oral disease; and Usher Syndrome 2A, which is a form of retinitis pigmentosa that also includes hearing loss. In addition, it develops hematopoietic stem cells for treating sickle cell disease and beta thalassemia. Editas Medicine, Inc. has a collaboration and license agreement with Juno Therapeutics, Inc. for the research and development of engineered T cells with chimeric antigen receptors and T cell receptors; and strategic alliance and option agreement with Allergan Pharmaceuticals International Limited for the research and development of medicines for ocular diseases. The company was formerly known as Gengine, Inc. and changed its name to Editas Medicine Inc. in November 2013. Editas Medicine, Inc. was founded in 2013 and is based in Cambridge, Massachusetts.

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