Analyzing Verrica Pharmaceuticals (NASDAQ:VRCA) & Zoetis (NYSE:ZTS)

Verrica Pharmaceuticals (NASDAQ:VRCA) and Zoetis (NYSE:ZTS) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Verrica Pharmaceuticals and Zoetis, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verrica Pharmaceuticals	0	0	4	0	3.00
Zoetis	0	0	7	0	3.00

Verrica Pharmaceuticals presently has a consensus target price of $13.50, suggesting a potential upside of 50.33%. Zoetis has a consensus target price of $211.75, suggesting a potential upside of 23.07%. Given Verrica Pharmaceuticals’ higher possible upside, equities research analysts plainly believe Verrica Pharmaceuticals is more favorable than Zoetis.

Volatility & Risk

Verrica Pharmaceuticals has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500. Comparatively, Zoetis has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Insider and Institutional Ownership

42.5% of Verrica Pharmaceuticals shares are held by institutional investors. Comparatively, 92.8% of Zoetis shares are held by institutional investors. 42.6% of Verrica Pharmaceuticals shares are held by insiders. Comparatively, 0.2% of Zoetis shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Verrica Pharmaceuticals and Zoetis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verrica Pharmaceuticals	-905.83%	-229.26%	-88.77%
Zoetis	27.38%	50.34%	17.59%

Valuation and Earnings

This table compares Verrica Pharmaceuticals and Zoetis’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verrica Pharmaceuticals	$5.12 million	74.90	-$67.00 million	($1.75)	-5.17
Zoetis	$8.54 billion	9.14	$2.34 billion	$5.19	32.98

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

Summary

Zoetis beats Verrica Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Verrica Pharmaceuticals

Verrica Pharmaceuticals Inc., a clinical-stage dermatology therapeutics company, develops medications for the treatment of skin diseases in the United States. Its product pipeline comprises YCANTH (VP-102), which is in phase III clinical trial for the treatment of common warts; and has completed phase II clinical trial for the treatment of external genital warts. The company also develops VP-315, an oncolytic peptide-based injectable therapy, which is in phase II clinical trial for the treatment of dermatology oncologic conditions which includes basal cell carcinoma; and VP-103, a cantharidin-based product candidate for the treatment of plantar warts and is in phase II clinical trial. In addition, it offers YCANTH for the treatment of molluscum contagiosum. The company has a collaboration and license agreement with Torii Pharmaceutical Co., Ltd. for the development and commercialization of its product candidates for the treatment of molluscum contagiosum and common warts in Japan, including VP-102; and a license agreement with Lytix Biopharma AS to develop and commercialize VP-315 for dermatological oncology indications, such as non-metastatic melanoma and non-metastatic merkel cell carcinoma. Verrica Pharmaceuticals Inc. was incorporated in 2013 and is headquartered in West Chester, Pennsylvania.

About Zoetis

Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of animal health medicines, vaccines, and diagnostic products and services in the United States and internationally. The company commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep and others; and companion animals comprising dogs, cats, and horses. It also offers parasiticides, vaccines, dermatology, other pharmaceutical, anti-infectives, animal health diagnostics, and medicated feed additives. In addition, the company provides animal health diagnostics, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services, and blood glucose monitors; and other non-pharmaceutical products, which include nutritionals, as well as products and services in biodevices, genetic tests, and precision animal health. It markets its products to veterinarians, livestock producers, and pet owners. The company has collaboration Blacksmith Medicines, Inc. to discover and develop novel antibiotics for animal health. Zoetis Inc. was founded in 1952 and is headquartered in Parsippany, New Jersey.