Critical Analysis: Cognition Therapeutics (NASDAQ:CGTX) & Black Diamond Therapeutics (NASDAQ:BDTX)

Black Diamond Therapeutics (NASDAQ:BDTX) and Cognition Therapeutics (NASDAQ:CGTX) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Profitability

This table compares Black Diamond Therapeutics and Cognition Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Black Diamond Therapeutics	N/A	-76.43%	-56.24%
Cognition Therapeutics	N/A	-83.48%	-63.07%

Risk and Volatility

Black Diamond Therapeutics has a beta of 2.64, indicating that its stock price is 164% more volatile than the S&P 500. Comparatively, Cognition Therapeutics has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500.

Insider & Institutional Ownership

95.5% of Black Diamond Therapeutics shares are held by institutional investors. Comparatively, 43.4% of Cognition Therapeutics shares are held by institutional investors. 9.1% of Black Diamond Therapeutics shares are held by company insiders. Comparatively, 23.8% of Cognition Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Black Diamond Therapeutics and Cognition Therapeutics’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Black Diamond Therapeutics	N/A	N/A	-$82.44 million	($1.88)	-2.80
Cognition Therapeutics	N/A	N/A	-$25.79 million	($0.86)	-2.14

Black Diamond Therapeutics is trading at a lower price-to-earnings ratio than Cognition Therapeutics, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Black Diamond Therapeutics and Cognition Therapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Black Diamond Therapeutics	0	0	4	0	3.00
Cognition Therapeutics	0	0	3	0	3.00

Black Diamond Therapeutics currently has a consensus price target of $12.25, indicating a potential upside of 132.89%. Cognition Therapeutics has a consensus price target of $6.67, indicating a potential upside of 262.32%. Given Cognition Therapeutics’ higher probable upside, analysts clearly believe Cognition Therapeutics is more favorable than Black Diamond Therapeutics.

About Black Diamond Therapeutics

Black Diamond Therapeutics, Inc., a clinical-stage oncology medicine company, focuses on the discovery and development of MasterKey therapies for patients with genetically defined tumors. The company's lead product candidate is BDTX-1535, a brain-penetrant epidermal growth factor receptor MasterKey inhibitor, which is in phase 2 clinical trial for the treatment of epidermal growth factor receptor mutant non-small cell lung cancer, as well as phase 1 clinical trial to treat glioblastoma. It is also developing BDTX-4933, a brain-penetrant RAF MasterKey inhibitor targeting KRAS, NRAS, and BRAF alterations in solid tumors that is in phase 1 clinical trial. In addition, the company is developing BDTX-4876, a MasterKey inhibitor of oncogenic FGFR2/3 mutations with selectivity versus FGFR1/4, which is in preclinical stage. The company was formerly known as ASET Therapeutics, Inc. and changed its name to Black Diamond Therapeutics, Inc. in January 2018. Black Diamond Therapeutics, Inc. was incorporated in 2014 and is headquartered in Cambridge, Massachusetts.

About Cognition Therapeutics

Cognition Therapeutics, Inc., a clinical-stage biopharmaceutical company, engages in the discovery and development of small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system and retina. Its lead product candidate is CT1812, an orally delivered molecule modulator designed to penetrate the blood-brain barrier and bind selectively to the S2R complex for the treatment of Alzheimer's disease. The company is also developing COG0201 SHINE, a randomized double-blind and placebo-controlled for mild-to-moderate AD and is in phase II clinical trial. Its product pipeline also includes CT2168 for Synucleinopathies; and CT2074 for dry age-related macular degeneration. The company was incorporated in 2007 and is headquartered in Purchase, New York.