Head-To-Head Analysis: Deciphera Pharmaceuticals (DCPH) and Merus (MRUS)

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Deciphera Pharmaceuticals (NASDAQ:DCPH) and Merus (NASDAQ:MRUS) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Risk and Volatility

Deciphera Pharmaceuticals has a beta of 3.79, indicating that its share price is 279% more volatile than the S&P 500. Comparatively, Merus has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Institutional & Insider Ownership

53.5% of Deciphera Pharmaceuticals shares are owned by institutional investors. Comparatively, 54.4% of Merus shares are owned by institutional investors. 20.6% of Deciphera Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Deciphera Pharmaceuticals and Merus’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Deciphera Pharmaceuticals N/A N/A -$50.28 million ($2.99) -6.69
Merus $15.36 million 20.26 -$82.61 million ($4.29) -3.21

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

Analyst Ratings

This is a summary of recent recommendations for Deciphera Pharmaceuticals and Merus, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deciphera Pharmaceuticals 1 1 8 0 2.70
Merus 0 1 1 0 2.50

Deciphera Pharmaceuticals presently has a consensus target price of $46.75, suggesting a potential upside of 133.75%. Merus has a consensus target price of $31.00, suggesting a potential upside of 125.45%. Given Deciphera Pharmaceuticals’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Deciphera Pharmaceuticals is more favorable than Merus.

Profitability

This table compares Deciphera Pharmaceuticals and Merus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deciphera Pharmaceuticals N/A -33.14% -30.05%
Merus -178.79% -67.34% -23.01%

Summary

Deciphera Pharmaceuticals beats Merus on 9 of the 13 factors compared between the two stocks.

About Deciphera Pharmaceuticals

Deciphera Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops drugs to enhance the lives of cancer patients by addressing key mechanisms of drug resistance that limit the rate and durability of response of various cancer therapies. The company's lead drug candidate is DCC-2618, which is in Phase III trial for the treatment of gastrointestinal stromal tumors; and that is in Phase I trial for treating advanced systemic mastocytosis, gliomas, and other solid tumors. It is also developing immunokinase inhibitors comprising DCC-3014 that is in Phase I trial for treatment of solid tumors and hematologic malignancies; and Rebastinib, which is in Phase 1b trial to treat breast cancer, as well as to investigate in combination with chemotherapy and checkpoint inhibitors. The company was founded in 2003 and is headquartered in Waltham, Massachusetts.

About Merus

Merus N.V., a clinical-stage immuno-oncology company, engages in developing bispecific antibody therapeutics. Its bispecific antibody candidate pipeline includes MCLA-128, which is in a Phase II clinical trial for the treatment of patients with metastatic breast cancer; and Phase I/II study for treating gastric, ovarian, endometrial, and non-small cell lung cancers. The company is also developing MCLA-117 that is in Phase I clinical trial for the treatment of patients with acute myeloid leukemia; and MCLA-158, which is in a Phase I clinical trial for treating metastatic colorectal cancer. In addition, its preclinical development stage bispecific antibody candidates include MCLA-145, which is being developed in collaboration with Incyte Corporation; and other preclinical candidates in various stages of development. Merus N.V. has collaboration with the Integral Molecular for discovering MAbs against structurally complex proteins; and Lipoparticles, virus-like particles displaying high concentrations of membrane proteins. The company was founded in 2003 and is headquartered in Utrecht, the Netherlands.

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