Reviewing Terns Pharmaceuticals (NASDAQ:TERN) and Verastem (NASDAQ:VSTM)

Terns Pharmaceuticals (NASDAQ:TERN – Get Free Report) and Verastem (NASDAQ:VSTM – Get Free Report) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Profitability

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

Valuation & Earnings

This table compares Terns Pharmaceuticals and Verastem”s revenue, earnings per share (EPS) and valuation.

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

Analyst Ratings

This is a summary of current ratings for Terns Pharmaceuticals and Verastem, as reported by MarketBeat.com.

Terns Pharmaceuticals presently has a consensus target price of $55.56, suggesting a potential upside of 51.79%. Verastem has a consensus target price of $14.29, suggesting a potential upside of 113.86%. Given Verastem’s higher possible upside, analysts plainly believe Verastem is more favorable than Terns Pharmaceuticals.

Risk & Volatility

Terns Pharmaceuticals has a beta of -0.28, meaning that its stock price is 128% less volatile than the S&P 500. Comparatively, Verastem has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Institutional and Insider Ownership

98.3% of Terns Pharmaceuticals shares are owned by institutional investors. Comparatively, 88.4% of Verastem shares are owned by institutional investors. 1.5% of Terns Pharmaceuticals shares are owned by company insiders. Comparatively, 2.1% of Verastem shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Verastem beats Terns Pharmaceuticals on 7 of the 13 factors compared between the two stocks.

About Terns Pharmaceuticals

(Get Free Report)

Terns Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops small-molecule product candidates for the treatment of oncology, metabolic dysfunction-associated steatohepatitis (MASH), and obesity. The company develops TERN-701, an allosteric BCR-ABL tyrosine kinase inhibitor (TKI) that is in phase 1 clinical trial for chronic myeloid leukemia (CML), a form of cancer that starts in bone marrow. It also develops TERN-501, a thyroid hormone receptor beta agonist with enhanced liver distribution and metabolic stability that is in Phase IIa clinical trial for the treatment of MASH; and TERN-601, a small-molecule Glucagon-Like Peptide-1 receptor agonist program that is intended to orally be administered for obesity. The company was incorporated in 2016 and is headquartered in Foster City, California.

About Verastem

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Verastem, Inc., a development-stage biopharmaceutical company, focuses on developing and commercializing drugs for the treatment of cancer in the United States. Its product candidates are Avutometinib, an orally available small molecule RAF/MEK clamp that inhibits the ras sarcoma RAF/MEK, ERK mitogen activated pathway kinase pathway which is involved in cell proliferation, migration, transformation, and survival of tumor cells; and Defactinib, an oral small molecule inhibitor of FAK and proline-rich tyrosine kinase for various solid tumors. The company is involved in clinical studies, including RAMP 301, a randomized global confirmatory trial to evaluate the combination of Avutometinib and Defactinib for the treatment of patients with recurrent low-grade serous ovarian cancer; RAMP 201, an adaptive two-part multicenter, parallel cohort, randomized open label trial to evaluate the efficacy and safety of Avutometinib and in combination with Defactinib; and FRAME, an investigation of Avutometinib and Defactinib in patients with KRAS mutant cancers and subsequent analyses; and RAMP 204 and 205. It has license agreements with Chugai Pharmaceutical Co., Ltd. for the development, commercialization, and manufacture of products containing Avutometinib; and Pfizer Inc. to research, develop, manufacture, and commercialize products containing Pfizer's inhibitors of FAK for therapeutic, diagnostic, and prophylactic uses in humans. In addition, it has a clinical collaboration agreement with Amgen, Inc. to evaluate the combination of Avutometinib with Amgen's KRAS-G12C inhibitor LUMAKRAS which in Phase 1/2 trial entitled RAMP 203; and a discovery and development collaboration with GenFleet Therapeutics to advance new programs targeting RAS pathway-driven cancers. Verastem, Inc. was incorporated in 2010 and is headquartered in Needham, Massachusetts.