Reviewing Timber Pharmaceuticals (NYSE:TMBR) & Verastem (NASDAQ:VSTM)

Timber Pharmaceuticals (NYSE:TMBR – Get Rating) and Verastem (NASDAQ:VSTM – Get Rating) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Profitability

This table compares Timber Pharmaceuticals and Verastem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timber Pharmaceuticals	N/A	-177.39%	-105.08%
Verastem	N/A	-124.62%	-69.85%

Analyst Recommendations

This is a breakdown of recent recommendations for Timber Pharmaceuticals and Verastem, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timber Pharmaceuticals	0	0	1	0	3.00
Verastem	0	0	5	0	3.00

Timber Pharmaceuticals currently has a consensus price target of $50.00, suggesting a potential upside of 1,892.03%. Verastem has a consensus price target of $4.25, suggesting a potential upside of 831.00%. Given Timber Pharmaceuticals’ higher possible upside, equities research analysts clearly believe Timber Pharmaceuticals is more favorable than Verastem.

Institutional & Insider Ownership

60.6% of Verastem shares are owned by institutional investors. 0.9% of Timber Pharmaceuticals shares are owned by insiders. Comparatively, 2.9% of Verastem shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Timber Pharmaceuticals and Verastem’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timber Pharmaceuticals	$890,000.00	8.26	-$10.64 million	($14.02)	-0.18
Verastem	$2.60 million	35.23	-$71.20 million	($0.38)	-1.20

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

Volatility and Risk

Timber Pharmaceuticals has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500. Comparatively, Verastem has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Summary

Verastem beats Timber Pharmaceuticals on 9 of the 11 factors compared between the two stocks.

About Timber Pharmaceuticals

(Get Rating)

Timber Pharmaceuticals, Inc. operates as a biopharmaceutical company focused on the development and commercialization of treatments for orphan dermatologic diseases. Its initial focus is on developing non-systemic treatments for rare dermatologic diseases, including congenital ichthyosis, facial angiofibromas in tuberous sclerosis complex, and other sclerotic skin diseases. The company was founded in 2019 and is headquartered in Basking Ridge, NJ.

About Verastem

(Get Rating)

Verastem, Inc. is a biopharmaceutical company, which engages in the development and commercialization of drugs for the treatment of cancer. The company was founded by Richard H. Aldrich, Michelle Dipp, Piyush Gupta, Satish Jindal, Eric S. Lander, Robert F. Weinberg, and Christoph H. Westphal on August 4, 2010 and is headquartered in Needham, MA.