Legend Biotech (NASDAQ:LEGN – Get Free Report) and COMPASS Pathways (NASDAQ:CMPS – Get Free Report) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
Profitability
This table compares Legend Biotech and COMPASS Pathways’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Legend Biotech | -66.92% | -29.69% | -19.45% |
| COMPASS Pathways | N/A | -63.85% | -51.97% |
Insider & Institutional Ownership
70.9% of Legend Biotech shares are owned by institutional investors. Comparatively, 46.2% of COMPASS Pathways shares are owned by institutional investors. 0.0% of Legend Biotech shares are owned by insiders. Comparatively, 4.3% of COMPASS Pathways shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Legend Biotech | $285.14 million | 22.66 | -$518.25 million | ($0.95) | -37.24 |
| COMPASS Pathways | N/A | N/A | -$118.46 million | ($2.20) | -2.00 |
COMPASS Pathways has lower revenue, but higher earnings than Legend Biotech. Legend Biotech is trading at a lower price-to-earnings ratio than COMPASS Pathways, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Legend Biotech has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500. Comparatively, COMPASS Pathways has a beta of 2.28, meaning that its share price is 128% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings for Legend Biotech and COMPASS Pathways, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Legend Biotech | 0 | 0 | 12 | 0 | 3.00 |
| COMPASS Pathways | 0 | 0 | 6 | 0 | 3.00 |
Legend Biotech presently has a consensus price target of $79.50, suggesting a potential upside of 124.70%. COMPASS Pathways has a consensus price target of $33.60, suggesting a potential upside of 661.90%. Given COMPASS Pathways’ higher probable upside, analysts clearly believe COMPASS Pathways is more favorable than Legend Biotech.
About Legend Biotech
Legend Biotech Corporation, a clinical-stage biopharmaceutical company, through its subsidiaries, engages in the discovery, development, manufacturing, and commercialization of novel cell therapies for oncology and other indications in the United States, China, and internationally. Its lead product candidate, LCAR- B38M, is a chimeric antigen receptor for the treatment of multiple myeloma (MM). The company also has a portfolio of earlier-stage autologous CAR-T product candidates targeting various cancers, including Non-Hodgkins Lymphoma, acute lymphoblastic leukemia, gastric cancer, esophageal cancer, pancreatic cancer, colorectal cancer, hepatocellular carcinoma, small cell lung cancer, and non-small cell lung cancer. It has collaboration and license agreement with Janssen Biotech, Inc. for the development and commercialization of ciltacabtagene autoleucel. The company was founded in 2014 and is based in Somerset, New Jersey. Legend Biotech Corporation is a subsidiary of Genscript Biotech Corporation.
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.
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