Critical Survey: HCW Biologics (NASDAQ:HCWB) & Generation Bio (NASDAQ:GBIO)

HCW Biologics (NASDAQ:HCWB) and Generation Bio (NASDAQ:GBIO) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares HCW Biologics and Generation Bio”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HCW Biologics	$2.84 million	6.69	-$24.99 million	($1.00)	-0.50
Generation Bio	$5.90 million	16.19	-$126.61 million	($2.19)	-0.65

HCW Biologics has higher earnings, but lower revenue than Generation Bio. Generation Bio is trading at a lower price-to-earnings ratio than HCW Biologics, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

HCW Biologics has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Generation Bio has a beta of 2.82, suggesting that its share price is 182% more volatile than the S&P 500.

Profitability

This table compares HCW Biologics and Generation Bio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HCW Biologics	-1,067.82%	-2,516.84%	-132.95%
Generation Bio	-782.86%	-104.85%	-49.54%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for HCW Biologics and Generation Bio, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HCW Biologics	0	0	0	0	0.00
Generation Bio	0	0	2	0	3.00

Generation Bio has a consensus target price of $7.50, suggesting a potential upside of 424.48%. Given Generation Bio’s stronger consensus rating and higher possible upside, analysts clearly believe Generation Bio is more favorable than HCW Biologics.

Insider and Institutional Ownership

3.0% of HCW Biologics shares are owned by institutional investors. Comparatively, 95.2% of Generation Bio shares are owned by institutional investors. 49.9% of HCW Biologics shares are owned by company insiders. Comparatively, 21.1% of Generation Bio shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Generation Bio beats HCW Biologics on 10 of the 14 factors compared between the two stocks.

About HCW Biologics

HCW Biologics Inc., a clinical-stage biopharmaceutical company, focuses on discovering and developing novel immunotherapies for chronic, low-grade inflammation, and age-related diseases in the United States. The company's lead products include HCW9218, which is in Phase 1 clinical chemo-refractory/chemo-resistant solid tumors with pancreatic, ovarian, breast, prostate, and colorectal cancers, as well as Phase 2 clinical trial with metastatic advanced stage ovarian cancer patients; and HCW9302 for autoimmune and proinflammatory diseases, such as alopecia areata diseases. It also develops HCW9201, a cell-based therapy that is in Phase I clinical trials for the treatment of patients with relapsed/refractory acute myelogenous leukemia; and HCW9206, an injectable immunotherapeutic to use as adjuvant for adoptive cell therapy in cancer treatment. HCW Biologics Inc. was incorporated in 2018 and is headquartered in Miramar, Florida.

About Generation Bio

Generation Bio Co. develops non-viral genetic medicines for the treatment of rare and prevalent diseases. The company develops cell-targeted lipid nanoparticle (ctLNP) platform, a modular delivery system for nucleic acids to avoid off-target clearance by the liver and spleen that enables ctLNPs to persist in systemic circulation, which allows for highly selective and potent ligand-driven targeting to specific tissues and cell types; and novel immune-quiet DNA (iqDNA) to enable long-lasting high levels of gene expression from non-integrating episomes and avoids innate immune sensors that have long prevented DNA from use in non-viral systems. It uses its platform for developing a portfolio of programs for treating cancer, autoimmune, hematologic disorders, prioritizing sickle cell, beta-thalassemia, and hemophilia A diseases, as well as for other tissues and cell types, including retina, skeletal muscle, and central nervous system. The company was formerly known as Torus Therapeutics, Inc. and changed its name to Generation Bio Co. in November 2017. Generation Bio Co. was incorporated in 2016 and is headquartered in Cambridge, Massachusetts.