Critical Analysis: Talaris Therapeutics (NASDAQ:TALS) versus Sutro Biopharma (NASDAQ:STRO)

Talaris Therapeutics (NASDAQ:TALSGet Rating) and Sutro Biopharma (NASDAQ:STROGet Rating) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Valuation and Earnings

This table compares Talaris Therapeutics and Sutro Biopharma’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Talaris Therapeutics N/A N/A -$47.83 million ($1.49) -5.36
Sutro Biopharma $61.88 million 2.93 -$105.54 million ($2.47) -1.56

Talaris Therapeutics has higher earnings, but lower revenue than Sutro Biopharma. Talaris Therapeutics is trading at a lower price-to-earnings ratio than Sutro Biopharma, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Talaris Therapeutics and Sutro Biopharma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Talaris Therapeutics N/A -22.90% -22.21%
Sutro Biopharma -215.16% -42.97% -33.22%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Talaris Therapeutics and Sutro Biopharma, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Talaris Therapeutics 0 0 3 0 3.00
Sutro Biopharma 0 0 4 0 3.00

Talaris Therapeutics presently has a consensus price target of $25.00, indicating a potential upside of 213.28%. Sutro Biopharma has a consensus price target of $24.00, indicating a potential upside of 521.76%. Given Sutro Biopharma’s higher possible upside, analysts clearly believe Sutro Biopharma is more favorable than Talaris Therapeutics.

Insider & Institutional Ownership

74.8% of Talaris Therapeutics shares are held by institutional investors. Comparatively, 92.7% of Sutro Biopharma shares are held by institutional investors. 5.1% of Sutro Biopharma shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Sutro Biopharma beats Talaris Therapeutics on 6 of the 11 factors compared between the two stocks.

Talaris Therapeutics Company Profile (Get Rating)

Talaris Therapeutics, Inc. operates as a late-clinical stage cell therapy company in the United States. The company engages in developing a method of allogeneic hematopoietic stem cell transplantation to transform the standard of care in solid organ transplantation and severe autoimmune diseases, as well as severe non-malignant blood, immune, and metabolic disorders. Its lead product candidate is FCR001, a novel allogeneic cell therapy that is in Phase II trial for living donor kidney transplant patients. The company is also developing FCR002 in deceased donor kidney transplants; FCR001 in patients with a severe form of scleroderma; and FCR001 for one or more severe non-malignant blood, immune, or metabolic disorders. Talaris Therapeutics, Inc. was founded in 1988 and is headquartered in Louisville, Kentucky.

Sutro Biopharma Company Profile (Get Rating)

Sutro Biopharma, Inc. operates as clinical stage drug discovery, development, and manufacturing company. It focuses on creating protein therapeutics for cancer and autoimmune disorders through integrated cell-free protein synthesis and site-specific conjugation platform, XpressCF+.The company's product candidates include STRO-001, an antibody-drug conjugate (ADC) directed against the cancer target CD74 for patients with multiple myeloma and non-Hodgkin lymphoma that is in Phase 1 clinical trials; and STRO-002, an ADC directed against folate receptor-alpha for patients with ovarian and endometrial cancers, which is in Phase 1 clinical trials. It has collaboration and license agreements with Merck Collaboration to develop research programs focusing on cytokine derivatives for cancer and autoimmune disorders; and Celgene Corporation to discover and develop bispecific antibodies and/or ADCs focused on the field of immuno-oncology. The company was formerly known as Fundamental Applied Biology, Inc. Sutro Biopharma, Inc. was incorporated in 2003 and is headquartered in South San Francisco, California.

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