Critical Review: Veracyte (VCYT) versus Its Competitors

Veracyte (NASDAQ:VCYT) is one of 844 public companies in the “Biotechnology” industry, but how does it contrast to its peers? We will compare Veracyte to related businesses based on the strength of its earnings, dividends, risk, analyst recommendations, valuation, profitability and institutional ownership.

Profitability

This table compares Veracyte and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Veracyte	21.80%	9.13%	8.53%
Veracyte Competitors	-12,359.35%	-203.09%	-30.93%

Valuation and Earnings

This table compares Veracyte and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Veracyte	$517.15 million	$66.35 million	17.02
Veracyte Competitors	$735.41 million	$13.62 million	-14.86

Veracyte’s peers have higher revenue, but lower earnings than Veracyte. Veracyte is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings and target prices for Veracyte and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veracyte	1	4	6	1	2.58
Veracyte Competitors	9800	15084	45398	1579	2.54

Veracyte currently has a consensus price target of $51.40, suggesting a potential upside of 114.17%. As a group, “Biotechnology” companies have a potential upside of 104.17%. Given Veracyte’s stronger consensus rating and higher probable upside, research analysts plainly believe Veracyte is more favorable than its peers.

Risk & Volatility

Veracyte has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500. Comparatively, Veracyte’s peers have a beta of 1.15, indicating that their average share price is 15% more volatile than the S&P 500.

Institutional and Insider Ownership

47.9% of shares of all “Biotechnology” companies are owned by institutional investors. 1.6% of Veracyte shares are owned by company insiders. Comparatively, 13.0% of shares of all “Biotechnology” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Veracyte beats its peers on 9 of the 13 factors compared.

Veracyte Company Profile

Veracyte, Inc. engages in the research, development and commercialization of diagnostic products. The firm’s portfolio includes Afirma, Percepta, and Envisia. It intends to treat thyroid cancer, improve lung cancer screening, and clarify the diagnosis of idiopathic pulmonary fibrosis. The company was founded by Bonnie H. Anderson and Y. Douglas Dolginow on August 15, 2006 and is headquartered in South San Francisco, CA.