Financial Survey: HH&L Acquisition (NYSE:HHLA) and Veracyte (NASDAQ:VCYT)

Veracyte (NASDAQ:VCYT) and HH&L Acquisition (NYSE:HHLA) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Profitability

This table compares Veracyte and HH&L Acquisition’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Veracyte	-20.61%	-2.02%	-1.89%
HH&L Acquisition	N/A	-57.47%	-0.35%

Valuation & Earnings

This table compares Veracyte and HH&L Acquisition’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Veracyte	$361.05 million	4.48	-$74.40 million	($1.03)	-21.51
HH&L Acquisition	N/A	N/A	$17.69 million	($0.14)	-76.78

HH&L Acquisition has lower revenue, but higher earnings than Veracyte. HH&L Acquisition is trading at a lower price-to-earnings ratio than Veracyte, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Veracyte has a beta of 1.64, indicating that its share price is 64% more volatile than the S&P 500. Comparatively, HH&L Acquisition has a beta of -0.01, indicating that its share price is 101% less volatile than the S&P 500.

Insider & Institutional Ownership

39.2% of HH&L Acquisition shares are owned by institutional investors. 2.6% of Veracyte shares are owned by insiders. Comparatively, 0.5% of HH&L Acquisition shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Veracyte and HH&L Acquisition, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veracyte	1	0	4	0	2.60
HH&L Acquisition	0	0	0	0	N/A

Veracyte presently has a consensus target price of $30.00, suggesting a potential upside of 35.38%. Given Veracyte’s higher possible upside, research analysts clearly believe Veracyte is more favorable than HH&L Acquisition.

Summary

Veracyte beats HH&L Acquisition on 7 of the 12 factors compared between the two stocks.

About Veracyte

Veracyte, Inc. operates as a diagnostics company in the United States and internationally. The company offers Afirma Genomic Sequencing Classifier for cancerous thyroid nodules; Decipher Prostate Biopsy and Radical Prostatectomy for prostate cancer diagnosis; Prosigna Breast Cancer Assay for breast cancer diagnosis; Percepta Nasal Swab Test for lung cancer diagnosis; and Envisia Genomic Classifier for diagnosing interstitial lung disease, including idiopathic pulmonary fibrosis. It is also developing Envisia Classifier, the nCounter analysis system; and LymphMark for lymphoma subtyping test. The company was formerly known as Calderome, Inc. and changed its name to Veracyte, Inc. in March 2008. Veracyte, Inc. was incorporated in 2006 and is headquartered in South San Francisco, California.

About HH&L Acquisition

HH&L Acquisition Co. does not have significant operations. It focuses on effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. The company intends to focus on healthcare or healthcare-related companies in Asian markets. HH&L Acquisition Co. was incorporated in 2020 and is based in Central, Hong Kong.