Reviewing Schrodinger (NASDAQ:SDGR) & Talkspace (NASDAQ:TALK)

Schrodinger (NASDAQ:SDGR) and Talkspace (NASDAQ:TALK) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Profitability

This table compares Schrodinger and Talkspace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Schrodinger	-40.37%	-29.47%	-14.69%
Talkspace	3.40%	6.89%	5.87%

Analyst Ratings

This is a breakdown of recent ratings for Schrodinger and Talkspace, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Schrodinger	1	4	4	0	2.33
Talkspace	0	8	1	0	2.11

Schrodinger currently has a consensus price target of $21.13, suggesting a potential upside of 85.80%. Talkspace has a consensus price target of $5.56, suggesting a potential upside of 7.59%. Given Schrodinger’s stronger consensus rating and higher possible upside, research analysts plainly believe Schrodinger is more favorable than Talkspace.

Volatility and Risk

Schrodinger has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500. Comparatively, Talkspace has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Insider and Institutional Ownership

79.1% of Schrodinger shares are owned by institutional investors. Comparatively, 57.4% of Talkspace shares are owned by institutional investors. 21.0% of Schrodinger shares are owned by company insiders. Comparatively, 23.5% of Talkspace shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Schrodinger and Talkspace”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Schrodinger	$255.87 million	3.28	-$103.26 million	($1.42)	-8.01
Talkspace	$228.87 million	3.77	$7.79 million	$0.05	103.40

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

Summary

Talkspace beats Schrodinger on 8 of the 14 factors compared between the two stocks.

About Schrodinger

Schrödinger, Inc., together with its subsidiaries, develops physics-based computational platform that enables discovery of novel molecules for drug development and materials applications. The company operates in two segments, Software and Drug Discovery. The Software segment is focused on licensing its software to transform molecular discovery for life sciences and materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. The company serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.

About Talkspace

Talkspace, Inc. operates as a virtual behavioral healthcare company in the United States. The company offers psychotherapy and psychiatry services through its platform to individuals, enterprises, and health plans and employee assistance programs. It provides text, audio, and video-based psychotherapy from licensed therapists. The company offers Talkspace Employee Assistance Program (EAP) and Talkspace Behavioral Health plan (BH) that provides online therapy to members through BH and EAP offerings; and Talkspace for Business for members to access its platform services on a benefit plan paid by the enterprise. It serves its platform through third-party platforms or marketplace, such as Apple App Store and Google Play App Store. Talkspace, Inc. was founded in 2012 and is headquartered in New York, New York.