COMPASS Pathways (NASDAQ:CMPS) vs. eFFECTOR Therapeutics (NASDAQ:EFTR) Financial Survey

COMPASS Pathways (NASDAQ:CMPS) and eFFECTOR Therapeutics (NASDAQ:EFTR) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of current recommendations for COMPASS Pathways and eFFECTOR Therapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
COMPASS Pathways	0	0	5	0	3.00
eFFECTOR Therapeutics	0	0	2	0	3.00

COMPASS Pathways presently has a consensus target price of $47.40, indicating a potential upside of 485.19%. eFFECTOR Therapeutics has a consensus target price of $24.00, indicating a potential upside of 1,197.30%. Given eFFECTOR Therapeutics’ higher probable upside, analysts plainly believe eFFECTOR Therapeutics is more favorable than COMPASS Pathways.

Profitability

This table compares COMPASS Pathways and eFFECTOR Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
COMPASS Pathways	N/A	-58.72%	-49.46%
eFFECTOR Therapeutics	N/A	N/A	-160.00%

Risk and Volatility

COMPASS Pathways has a beta of 2.48, indicating that its share price is 148% more volatile than the S&P 500. Comparatively, eFFECTOR Therapeutics has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Valuation and Earnings

This table compares COMPASS Pathways and eFFECTOR Therapeutics’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
COMPASS Pathways	N/A	N/A	-$118.46 million	($2.39)	-3.39
eFFECTOR Therapeutics	$3.55 million	1.92	-$35.81 million	($16.92)	-0.11

eFFECTOR Therapeutics has higher revenue and earnings than COMPASS Pathways. COMPASS Pathways is trading at a lower price-to-earnings ratio than eFFECTOR Therapeutics, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

46.2% of COMPASS Pathways shares are owned by institutional investors. Comparatively, 57.7% of eFFECTOR Therapeutics shares are owned by institutional investors. 4.3% of COMPASS Pathways shares are owned by company insiders. Comparatively, 8.4% of eFFECTOR Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

eFFECTOR Therapeutics beats COMPASS Pathways on 7 of the 11 factors compared between the two stocks.

About COMPASS Pathways

COMPASS Pathways plc operates as a mental health care company in the United Kingdom and the United States. It develops COMP360, a psilocybin therapy that is in Phase III clinical trials for the treatment of treatment-resistant depression; and is in Phase II clinical trials for the treatment of post-traumatic stress disorder and anorexia nervosa. The company was formerly known as COMPASS Rx Limited and changed its name to COMPASS Pathways plc in August 2020. COMPASS Pathways plc was incorporated in 2020 and is headquartered in London, the United Kingdom.

About eFFECTOR Therapeutics

eFFECTOR Therapeutics, Inc., a biopharmaceutical company, engages in the development of selective translation regulator inhibitors (STRIs) for the treatment of cancer. The company's lead product candidates comprise Tomivosertib, an oral small-molecule inhibitor of MNK that is in phase 2b clinical trial for the treatment of patients with metastatic non-small cell lung cancer; and Zotatifin, a small molecule inhibitor of eukaryotic initiation factor 4A (eIF4E), which is in Phase 1/2 clinical trial to treat patients with solid tumors, as well as completed Phase 2a open-label expansion cohort in combination with fulvestrant and abemaciclib to treat patients with ER+ breast cancer. The company has a research collaboration and license agreement with Pfizer Inc. to research and develop small molecules that target eIF4E. eFFECTOR Therapeutics, Inc. was incorporated in 2012 and is headquartered in Solana Beach, California.