Critical Analysis: Cognition Therapeutics (NASDAQ:CGTX) vs. Editas Medicine (NASDAQ:EDIT)

Cognition Therapeutics (NASDAQ:CGTX) and Editas Medicine (NASDAQ:EDIT) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Cognition Therapeutics and Editas Medicine, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognition Therapeutics	0	1	5	0	2.83
Editas Medicine	2	9	3	0	2.07

Cognition Therapeutics presently has a consensus target price of $8.30, suggesting a potential upside of 999.34%. Editas Medicine has a consensus target price of $7.00, suggesting a potential upside of 422.39%. Given Cognition Therapeutics’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Cognition Therapeutics is more favorable than Editas Medicine.

Insider and Institutional Ownership

43.3% of Cognition Therapeutics shares are owned by institutional investors. Comparatively, 71.9% of Editas Medicine shares are owned by institutional investors. 20.8% of Cognition Therapeutics shares are owned by company insiders. Comparatively, 1.9% of Editas Medicine shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Cognition Therapeutics and Editas Medicine”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognition Therapeutics	N/A	N/A	-$25.79 million	($0.97)	-0.78
Editas Medicine	$61.76 million	1.79	-$153.22 million	($2.56)	-0.52

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

Profitability

This table compares Cognition Therapeutics and Editas Medicine’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cognition Therapeutics	N/A	-150.93%	-100.82%
Editas Medicine	-340.96%	-80.13%	-50.99%

Volatility & Risk

Cognition Therapeutics has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Editas Medicine has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Summary

Cognition Therapeutics beats Editas Medicine on 7 of the 13 factors compared between the two stocks.

About Cognition Therapeutics

Cognition Therapeutics, Inc., a clinical-stage biopharmaceutical company, engages in the discovery and development of small molecule therapeutics targeting age-related degenerative diseases and disorders of the central nervous system and retina. Its lead product candidate is CT1812, an orally delivered molecule modulator designed to penetrate the blood-brain barrier and bind selectively to the S2R complex, which is in Phase 2 clinical trial for the treatment of Alzheimer's disease, as well as geographic atrophy secondary to dry age-related macular degeneration and synucleinopathies, such as dementia with Lewy bodies. The company was incorporated in 2007 and is headquartered in Purchase, New York.

About Editas Medicine

Editas Medicine, Inc., a clinical stage genome editing company, focuses on developing transformative genomic medicines to treat a range of serious diseases. It develops a proprietary gene editing platform based on CRISPR technology. The company develops EDIT-101, which is in Phase 1/2 BRILLIANCE trial for Leber Congenital Amaurosis; and reni-cel, a clinical development gene-edited medicine to treat sickle cell disease and transfusion-dependent beta-thalassemia. In addition, the company is developing alpha-beta T cells for solid and liquid tumors; and gamma delta T cell therapies to treat cancer. It has a research collaboration with Juno Therapeutics, Inc. to develop engineered T cells for cancer; strategic alliance and option agreement with Allergan Pharmaceuticals International Limited. The company was formerly known as Gengine, Inc. and changed its name to Editas Medicine, Inc. in November 2013. Editas Medicine, Inc. was incorporated in 2013 and is based in Cambridge, Massachusetts.