Absci (NASDAQ:ABSI – Get Free Report) and Mereo BioPharma Group (NASDAQ:MREO – Get Free Report) are both small-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.
Risk and Volatility
Absci has a beta of 2.27, indicating that its share price is 127% more volatile than the S&P 500. Comparatively, Mereo BioPharma Group has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500.
Valuation & Earnings
This table compares Absci and Mereo BioPharma Group”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Absci | $2.80 million | 562.64 | -$115.18 million | ($0.80) | -11.47 |
| Mereo BioPharma Group | $500,000.00 | 89.97 | -$41.88 million | ($0.04) | -7.04 |
Mereo BioPharma Group has lower revenue, but higher earnings than Absci. Absci is trading at a lower price-to-earnings ratio than Mereo BioPharma Group, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Absci and Mereo BioPharma Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Absci | -7,756.38% | -61.71% | -54.52% |
| Mereo BioPharma Group | N/A | -74.82% | -64.28% |
Analyst Ratings
This is a breakdown of current ratings for Absci and Mereo BioPharma Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Absci | 1 | 0 | 10 | 0 | 2.82 |
| Mereo BioPharma Group | 2 | 3 | 3 | 0 | 2.12 |
Absci currently has a consensus target price of $14.56, indicating a potential upside of 58.56%. Mereo BioPharma Group has a consensus target price of $1.67, indicating a potential upside of 491.65%. Given Mereo BioPharma Group’s higher probable upside, analysts plainly believe Mereo BioPharma Group is more favorable than Absci.
Insider & Institutional Ownership
52.0% of Absci shares are held by institutional investors. Comparatively, 62.8% of Mereo BioPharma Group shares are held by institutional investors. 10.5% of Absci shares are held by insiders. Comparatively, 6.5% of Mereo BioPharma Group shares are held by 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.
Summary
Absci beats Mereo BioPharma Group on 8 of the 13 factors compared between the two stocks.
About Absci
Absci Corporation operates as a data-first generative artificial intelligence (AI) drug creation company in the United States. The company combines AI with scalable wet lab technologies to create biologics for patients. Its integrated drug creation platform is designed to improve upon traditional biologic drug discovery by using AI to simultaneously optimize multiple drug characteristics that may be important to development and therapeutic benefit. The company was founded in 2011 and is headquartered in Vancouver, Washington.
About Mereo BioPharma Group
Mereo BioPharma Group plc, a biopharmaceutical company, develops and commercializes therapeutics for the treatment of oncology and rare diseases in the United Kingdom, the United States, and internationally. It develops Etigilimab (MPH-313), an antibody T-cell immunoreceptor with Ig and ITIM domains, which is in Phase 1b clinical trial for the treatment of tumors. The company is also developing Navicixizumab (OMP-305B83), which has completed Phase 1b clinical trials for the treatment of the late line ovarian cancer; Acumapimod (BCT-197), a p38 MAP kinase inhibitor that is in Phase II clinical trials to treat acute exacerbations of chronic obstructive pulmonary disease; and Leflutrozole (BGS-649), an oral aromatase inhibitor for the treatment of hypogonadotropic hypogonadism which is in Phase 2 trials. In addition, it develops rare disease product candidates, including Setrusumab (BPS-804), an antibody for the treatment of osteogenesis imperfecta; and Alvelestat (MPH-966), an oral small molecule that is in Phase II clinical trial to treat Alpha-1 anti-trypsin deficiency. The company has a license agreement with Feng Biosciences for the development and commercialization of navicixizumab; license agreement with ReproNovo for the development and commercialization of leflutrozole; licensing agreement with AstraZeneca; and license agreement with Ultragenyx Pharmaceutical Inc. to develop and commercialize setrusumab. Mereo BioPharma Group plc was incorporated in 2015 and is headquartered in London, the United Kingdom.
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