T2 Biosystems (NASDAQ:TTOO) and Valeritas (NASDAQ:VLRX) Critical Comparison

T2 Biosystems (NASDAQ:TTOO) and Valeritas (NASDAQ:VLRX) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.

Institutional and Insider Ownership

46.2% of T2 Biosystems shares are held by institutional investors. 30.3% of T2 Biosystems shares are held by company insiders. Comparatively, 1.0% of Valeritas shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares T2 Biosystems and Valeritas’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
T2 Biosystems $10.50 million 7.01 -$51.15 million ($1.26) -1.32
Valeritas $26.40 million 0.54 -$45.93 million ($34.20) -0.08

Valeritas has higher revenue and earnings than T2 Biosystems. T2 Biosystems is trading at a lower price-to-earnings ratio than Valeritas, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for T2 Biosystems and Valeritas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
T2 Biosystems 0 1 4 0 2.80
Valeritas 0 0 2 0 3.00

T2 Biosystems currently has a consensus target price of $8.00, indicating a potential upside of 381.93%. Valeritas has a consensus target price of $6.50, indicating a potential upside of 140.74%. Given T2 Biosystems’ higher possible upside, research analysts clearly believe T2 Biosystems is more favorable than Valeritas.

Profitability

This table compares T2 Biosystems and Valeritas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
T2 Biosystems -535.26% -325.79% -76.28%
Valeritas -183.53% -1,757.04% -87.00%

Risk & Volatility

T2 Biosystems has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, Valeritas has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500.

Summary

T2 Biosystems beats Valeritas on 8 of the 14 factors compared between the two stocks.

About T2 Biosystems

T2 Biosystems, Inc., an in vitro diagnostics company, develops diagnostic products and product candidates in the United States and internationally. It provides T2 Magnetic Resonance platform that enables detection of pathogens, biomarkers, and other abnormalities in various unpurified patient sample types, including whole blood, plasma, serum, saliva, sputum, and urine. The company also offers T2Dx, a bench-top instrument for detecting pathogens associated with sepsis and Lyme disease, and other applications, as well as T2Candida panel that identifies the species of Candida, a fungal pathogen known to cause sepsis directly from whole blood. In addition, it is developing Candida Auris, a multi-drug resistant pathogen; T2Bacteria, a multiplex diagnostic panel that detects various bacterial pathogens associated with sepsis; and T2Lyme for the detection of various strains of Lyme disease-causing bacteria. The company has collaboration agreements with Canon U.S. Life Sciences, Inc. to develop a diagnostic test panel to detect Lyme disease; and Allergan Sales, LLC to develop detection diagnostic test panel that adds one additional bacteria species to the existing T2Bacteria product candidate, as well as for testing drug resistance directly in whole blood. T2 Biosystems, Inc. was founded in 2006 and is headquartered in Lexington, Massachusetts.

About Valeritas

Valeritas Holdings, Inc., a commercial-stage medical technology company, focuses on the development and commercialization of technologies to treat patients with Type 2 diabetes in the United States. The company offers V-Go, a wearable insulin delivery device for basal-bolus therapy. It also develops V-Go Prefill that is in the design-development stage for eliminating the device-filling process and the need for EZ fill refrigeration for patients with Type 2 diabetes; and V-Go SIM for real-time tracking information of basal and bolus dosing utilization. The company sells V-Go to third-party wholesalers and medical supply distributors. Valeritas Holdings, Inc. was founded in 2006 and is headquartered in Bridgewater, New Jersey.

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