Vermillion (NASDAQ: VRML) and CareDx (NASDAQ:CDNA) are both small-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitabiliy, earnings, valuation, analyst recommendations and dividends.
Institutional and Insider Ownership
36.4% of Vermillion shares are owned by institutional investors. Comparatively, 36.8% of CareDx shares are owned by institutional investors. 3.7% of Vermillion shares are owned by company insiders. Comparatively, 5.4% of CareDx shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Vermillion and CareDx, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Vermillion | 0 | 0 | 1 | 0 | 3.00 |
| CareDx | 0 | 0 | 0 | 0 | N/A |
Vermillion presently has a consensus target price of $2.00, indicating a potential upside of 33.33%. Given Vermillion’s higher probable upside, equities analysts plainly believe Vermillion is more favorable than CareDx.
Profitability
This table compares Vermillion and CareDx’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Vermillion | -443.29% | -195.68% | -118.62% |
| CareDx | -77.02% | -69.67% | -20.13% |
Volatility & Risk
Vermillion has a beta of 2.37, suggesting that its share price is 137% more volatile than the S&P 500. Comparatively, CareDx has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.
Earnings & Valuation
This table compares Vermillion and CareDx’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Vermillion | $2.86 million | 29.42 | -$11.94 million | N/A | N/A |
| CareDx | $45.65 million | 0.66 | -$11.23 million | ($2.01) | -0.70 |
CareDx has higher revenue and earnings than Vermillion.
Summary
CareDx beats Vermillion on 7 of the 11 factors compared between the two stocks.
About Vermillion
Vermillion, Inc. is a diagnostic service and bio-analytic solutions provider. The Company is engaged in the business of developing and commercializing diagnostic tests for gynecologic disease. It sells OVA1 risk of malignancy test for pelvic mass disease (OVA1). OVA1 is a blood test designed to, in addition to a physician’s clinical assessment of a woman with a pelvic mass, identify women who are at risk of having a malignant ovarian tumor prior to planned surgery. It developed OVA1 through pre-clinical studies in collaboration with various academic medical centers encompassing over 2,500 clinical samples. OVA1 is validated in a multi-center clinical trial encompassing approximately 30 sites reflective of the diverse nature of the clinical centers, at which ovarian adnexal masses are evaluated. Its ASPiRA LABS is a laboratory that provides diagnostic services using a biomarker-based diagnostic algorithm to inform clinical decision making and personalized treatment plans.
About CareDx
CareDx, Inc. is a molecular diagnostics company. The Company is focused on the discovery, development and commercialization of clinically differentiated diagnostic surveillance solutions for transplant patients. The Company’s commercialized testing solution, the AlloMap heart transplant molecular test (AlloMap), is a gene expression test that helps clinicians monitor and identify heart transplant recipients with stable graft function having a low probability of moderate/severe acute cellular rejection. Its products under development for transplant monitoring include AlloSure, a development-stage transplant surveillance solution, which applies next generation sequencing to detect and quantitate genetic differences between donor-derived cell-free deoxyribonucleic acid (dd-cfDNA) in the blood stream emanating from the donor heart. It offers the AlloMap Score Variability service, which provides complementary information to help personalize long-term care of heart transplant recipients.
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