Critical Review: Mesoblast (NASDAQ:MESO) versus Tectonic Therapeutic (NASDAQ:TECX)

Mesoblast (NASDAQ:MESO) and Tectonic Therapeutic (NASDAQ:TECX) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Mesoblast and Tectonic Therapeutic, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mesoblast	0	0	4	0	3.00
Tectonic Therapeutic	0	0	4	1	3.20

Mesoblast presently has a consensus target price of $11.50, indicating a potential upside of 31.73%. Tectonic Therapeutic has a consensus target price of $60.00, indicating a potential upside of 33.78%. Given Tectonic Therapeutic’s stronger consensus rating and higher possible upside, analysts clearly believe Tectonic Therapeutic is more favorable than Mesoblast.

Profitability

This table compares Mesoblast and Tectonic Therapeutic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mesoblast	N/A	N/A	N/A
Tectonic Therapeutic	N/A	-41.05%	-37.33%

Insider & Institutional Ownership

1.4% of Mesoblast shares are held by institutional investors. Comparatively, 62.6% of Tectonic Therapeutic shares are held by institutional investors. 18.8% of Mesoblast shares are held by company insiders. Comparatively, 9.2% of Tectonic Therapeutic shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Mesoblast has a beta of 3.47, indicating that its stock price is 247% more volatile than the S&P 500. Comparatively, Tectonic Therapeutic has a beta of 2.6, indicating that its stock price is 160% more volatile than the S&P 500.

Valuation & Earnings

This table compares Mesoblast and Tectonic Therapeutic”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mesoblast	$5.90 million	168.95	-$87.96 million	N/A	N/A
Tectonic Therapeutic	N/A	N/A	$12.16 million	($5.17)	-8.68

Tectonic Therapeutic has lower revenue, but higher earnings than Mesoblast.

About Mesoblast

Mesoblast Limited engages in the development of regenerative medicine products in Australia, the United States, Singapore, and Switzerland. The company offers products in the areas of cardiovascular, spine orthopedic disorder, oncology, hematology, and immune-mediated and inflammatory diseases. Its proprietary regenerative medicine technology platform is based on specialized cells known as mesenchymal lineage cells. The company offers Remestemcel-L that is in Phase III clinical trials for the treatment of systemic inflammatory diseases, including steroid refractory acute graft versus host disease, acute respiratory distress syndrome, and biologic refractory inflammatory bowel disease; and Remestemcel-L, which is in Phase III clinical trials to treat chronic heart failure and chronic low back pain due to degenerative disc disease. It is also developing MPC-300-IV to treat biologic refractory rheumatoid arthritis diabetic nephropathy; and MPC-25-IC for the treatment or prevention of acute myocardial infarction. It has strategic partnerships with Tasly Pharmaceutical Group to offer MPC-150-IM for heart failure and MPC-25-IC for heart attacks in China; JCR Pharmaceuticals Co. Ltd. to treat wound healing in patients with epidermolysis bullosa; and Grünenthal to develops and commercializes cell therapy for the treatment of chronic low back pain. The company was incorporated in 2004 and is headquartered in Melbourne, Australia.

About Tectonic Therapeutic

Avrobio, Inc. is a bio-technology company. It develops step-change cell and gene therapies for the treatment of cancer and rare disease. The company operates primarily in the United States and Canada. Avrobio, Inc. is based in MA, United States.