Financial Analysis: Q32 Bio (NASDAQ:QTTB) versus Legend Biotech (NASDAQ:LEGN)

Legend Biotech (NASDAQ:LEGN) and Q32 Bio (NASDAQ:QTTB) are both healthcare 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.

Earnings and Valuation

This table compares Legend Biotech and Q32 Bio”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Legend Biotech	$1.27 billion	2.90	-$296.80 million	($0.25)	-76.22
Q32 Bio	$53.74 million	4.59	$29.82 million	$3.00	2.76

Q32 Bio has lower revenue, but higher earnings than Legend Biotech. Legend Biotech is trading at a lower price-to-earnings ratio than Q32 Bio, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Legend Biotech and Q32 Bio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Legend Biotech	-7.21%	-8.71%	-5.40%
Q32 Bio	N/A	50.17%	29.49%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Legend Biotech and Q32 Bio, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Legend Biotech	1	5	9	0	2.53
Q32 Bio	0	2	5	1	2.88

Legend Biotech presently has a consensus target price of $55.79, suggesting a potential upside of 192.76%. Q32 Bio has a consensus target price of $30.60, suggesting a potential upside of 269.12%. Given Q32 Bio’s stronger consensus rating and higher possible upside, analysts plainly believe Q32 Bio is more favorable than Legend Biotech.

Risk & Volatility

Legend Biotech has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Q32 Bio has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.

Institutional & Insider Ownership

70.9% of Legend Biotech shares are held by institutional investors. Comparatively, 31.3% of Q32 Bio shares are held by institutional investors. 0.0% of Legend Biotech shares are held by insiders. Comparatively, 34.5% of Q32 Bio 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.

Summary

Q32 Bio beats Legend Biotech on 11 of the 15 factors compared between the two stocks.

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 Q32 Bio

Q32 Bio Inc., a clinical-stage biotechnology company, develops biologic therapeutics to restore healthy immune balance in patients with autoimmune and inflammatory diseases driven by pathological immune dysfunction in the United States. Its lead product candidate is ADX-097, a humanized anti-C3d monoclonal antibody fusion protein to restore complement regulation, which has completed Phase I clinical trial for the treatment of renal and other complement-mediated diseases of high unmet need, including lupus nephritis, immunoglobulin A nephropathy, complement component 3 glomerulopathy, and anti-neutrophil cytoplasmic antibody-associated vasculitis. The company is also developing Bempikibart (ADX-914), a fully human antiinterleukin-7 receptor alpha antagonist monoclonal antibody designed to re-regulate adaptive immune function by blocking signaling mediated by interleukin-7 and thymic stromal lymphopoietin that is Phase II clinical trial for the treatment of atopic dermatitis and alopecia areata. Q32 Bio Inc. was formerly known as AdMIRx Inc. and changed its name to Q32 Bio Inc. in April 2020. The company was founded in 2017 and is based in Waltham, Massachusetts.