Analyzing COMPASS Pathways (NASDAQ:CMPS) & HealthEquity (NASDAQ:HQY)

HealthEquity (NASDAQ:HQY) and COMPASS Pathways (NASDAQ:CMPS) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Risk & Volatility

HealthEquity has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500. Comparatively, COMPASS Pathways has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500.

Institutional & Insider Ownership

99.6% of HealthEquity shares are held by institutional investors. Comparatively, 46.2% of COMPASS Pathways shares are held by institutional investors. 1.5% of HealthEquity shares are held by insiders. Comparatively, 3.9% of COMPASS Pathways shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares HealthEquity and COMPASS Pathways”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthEquity	$1.20 billion	6.80	$96.70 million	$2.18	43.81
COMPASS Pathways	N/A	N/A	-$155.12 million	($2.72)	-2.34

HealthEquity has higher revenue and earnings than COMPASS Pathways. COMPASS Pathways is trading at a lower price-to-earnings ratio than HealthEquity, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares HealthEquity and COMPASS Pathways’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthEquity	14.86%	12.94%	8.06%
COMPASS Pathways	N/A	-111.18%	-56.55%

Analyst Ratings

This is a breakdown of current recommendations and price targets for HealthEquity and COMPASS Pathways, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthEquity	0	3	12	2	2.94
COMPASS Pathways	1	1	7	0	2.67

HealthEquity presently has a consensus target price of $120.27, suggesting a potential upside of 25.93%. COMPASS Pathways has a consensus target price of $15.88, suggesting a potential upside of 149.22%. Given COMPASS Pathways’ higher possible upside, analysts plainly believe COMPASS Pathways is more favorable than HealthEquity.

Summary

HealthEquity beats COMPASS Pathways on 11 of the 14 factors compared between the two stocks.

About HealthEquity

HealthEquity, Inc. provides technology-enabled services platforms to consumers and employers in the United States. The company offers cloud-based platforms for individuals to make health saving and spending decisions, pay healthcare bills, receive personalized benefit information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides investment platform; and online-only automated investment advisory services through Advisor, a Web-based tool. In addition, the company offers flexible spending accounts; health reimbursement arrangements; and Consolidated Omnibus Budget Reconciliation Act continuation services, as well as administers pre-tax commuter benefit programs. It serves clients through a direct sales force; benefits brokers and advisors; and a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan record-keepers. HealthEquity, Inc. was incorporated in 2002 and is based in Draper, Utah.

About COMPASS Pathways

COMPASS Pathways plc operates as a mental health care company in the United Kingdom and the United States. It develops COMP360, a psilocybin therapy that is in Phase III clinical trials for the treatment of treatment-resistant depression; and is in Phase II clinical trials for the treatment of post-traumatic stress disorder and anorexia nervosa. The company was formerly known as COMPASS Rx Limited and changed its name to COMPASS Pathways plc in August 2020. COMPASS Pathways plc was incorporated in 2020 and is headquartered in London, the United Kingdom.