Contrasting Gritstone Oncology (NASDAQ:GRTS) & Sutro Biopharma (NASDAQ:STRO)

Sutro Biopharma (NASDAQ:STRO) and Gritstone Oncology (NASDAQ:GRTS) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Sutro Biopharma -84.03% N/A -21.60%
Gritstone Oncology -1,838.71% -54.23% -41.94%

Earnings and Valuation

This table compares Sutro Biopharma and Gritstone Oncology’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 6.66 -$35.32 million ($6.13) -1.81
Gritstone Oncology $1.19 million 262.11 -$64.78 million ($7.26) -1.20

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Sutro Biopharma and Gritstone Oncology, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sutro Biopharma 0 0 6 0 3.00
Gritstone Oncology 0 0 6 0 3.00

Sutro Biopharma presently has a consensus price target of $19.40, indicating a potential upside of 75.09%. Gritstone Oncology has a consensus price target of $21.25, indicating a potential upside of 143.97%. Given Gritstone Oncology’s higher probable upside, analysts clearly believe Gritstone Oncology is more favorable than Sutro Biopharma.

Institutional and Insider Ownership

51.1% of Sutro Biopharma shares are owned by institutional investors. Comparatively, 77.3% of Gritstone Oncology shares are owned by institutional investors. 28.9% of Sutro Biopharma shares are owned by insiders. Comparatively, 38.0% of Gritstone Oncology shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Sutro Biopharma has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Gritstone Oncology has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

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 Gritstone Oncology

Gritstone Oncology Inc., an immuno-oncology company, engages in developing tumor-specific cancer immunotherapies to fight various cancer types. Its lead product candidate is GRANITE-001, which is in Phase I/II clinical trial for the treatment of solid tumors, including metastatic non-small cell lung cancer, as well as gastroesophageal, bladder and microsatellite stable, and colorectal cancers. Gritstone Oncology Inc. has a strategic collaboration with bluebird bio, Inc. The company was founded in 2015 and is headquartered in Emeryville, California.

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