Critical Survey: Tarsus Pharmaceuticals (NASDAQ:TARS) vs. XBiotech (NASDAQ:XBIT)

Tarsus Pharmaceuticals (NASDAQ:TARS) and XBiotech (NASDAQ:XBIT) are both medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Tarsus Pharmaceuticals and XBiotech, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tarsus Pharmaceuticals	1	2	4	2	2.78
XBiotech	1	0	0	0	1.00

Tarsus Pharmaceuticals currently has a consensus price target of $90.67, suggesting a potential upside of 44.10%. Given Tarsus Pharmaceuticals’ stronger consensus rating and higher probable upside, research analysts plainly believe Tarsus Pharmaceuticals is more favorable than XBiotech.

Earnings and Valuation

This table compares Tarsus Pharmaceuticals and XBiotech”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tarsus Pharmaceuticals	$451.36 million	6.00	-$66.42 million	($1.14)	-55.19
XBiotech	N/A	N/A	-$45.54 million	($1.32)	-1.77

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

Institutional and Insider Ownership

90.0% of Tarsus Pharmaceuticals shares are owned by institutional investors. Comparatively, 55.7% of XBiotech shares are owned by institutional investors. 9.6% of Tarsus Pharmaceuticals shares are owned by company insiders. Comparatively, 30.8% of XBiotech shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Tarsus Pharmaceuticals and XBiotech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tarsus Pharmaceuticals	-9.02%	-14.19%	-8.89%
XBiotech	N/A	-26.10%	-25.06%

Risk and Volatility

Tarsus Pharmaceuticals has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, XBiotech has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Summary

Tarsus Pharmaceuticals beats XBiotech on 9 of the 14 factors compared between the two stocks.

About Tarsus Pharmaceuticals

Tarsus Pharmaceuticals, Inc., a commercial stage biopharmaceutical company, focuses on the development and commercialization of novel therapeutic candidates for eye care in the United States. The company's lead product candidate is XDEMVY, a novel therapeutic for the treatment of blepharitis caused by the infestation of Demodex mites, as well as to treat meibomian gland disease. It is developing TP-04 for the treatment of rosacea; and TP-05 for Lyme prophylaxis and community malaria reduction. In addition, the company develops lotilaner to address diseases across therapeutic categories in human medicine, including eye care, dermatology, and other infectious disease prevention. Tarsus Pharmaceuticals, Inc. was incorporated in 2016 and is headquartered in Irvine, California.

About XBiotech

XBiotech Inc., a biopharmaceutical company, discovers, develops, and commercializes True Human monoclonal antibodies for treating various diseases. The company focuses on developing a pipeline of product candidates targeting both inflammatory and infectious diseases. It is also developing interleukin-1 alpha therapies to treat variety of medical conditions, such as cancer, stroke, heart attack, or arthritis; and mediates tissue breakdown, angiogenesis, the formation of blood clots, malaise, muscle wasting, and inflammation. The company was incorporated in 2005 and is headquartered in Austin, Texas.