Reviewing CV Sciences (OTCMKTS:CVSI) and Zymeworks (NYSE:ZYME)

CV Sciences (OTCMKTS:CVSI) and Zymeworks (NYSE:ZYME) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

This table compares CV Sciences and Zymeworks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CV Sciences	-20.38%	-102.29%	-34.76%
Zymeworks	-249.63%	-28.37%	-21.98%

Insider & Institutional Ownership

92.9% of Zymeworks shares are owned by institutional investors. 1.3% of CV Sciences shares are owned by company insiders. Comparatively, 1.2% of Zymeworks shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

CV Sciences has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Zymeworks has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for CV Sciences and Zymeworks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CV Sciences	0	0	0	0	N/A
Zymeworks	0	1	2	0	2.67

Zymeworks has a consensus price target of $12.67, indicating a potential upside of 22.38%. Given Zymeworks’ higher possible upside, analysts clearly believe Zymeworks is more favorable than CV Sciences.

Earnings and Valuation

This table compares CV Sciences and Zymeworks’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CV Sciences	$16.00 million	0.55	$3.10 million	($0.02)	-2.41
Zymeworks	$76.01 million	9.63	-$118.67 million	($1.79)	-5.78

CV Sciences has higher earnings, but lower revenue than Zymeworks. Zymeworks is trading at a lower price-to-earnings ratio than CV Sciences, indicating that it is currently the more affordable of the two stocks.

Summary

Zymeworks beats CV Sciences on 8 of the 12 factors compared between the two stocks.

About CV Sciences

CV Sciences, Inc. develops, manufactures, markets, and sells herbal supplements and hemp-based cannabidiol (CBD) in North America. It operates in two segments, Consumer Products and Specialty Pharmaceutical. The company offers its products under the PlusCBD, ProCBD, HappyLane, CVAcute, CVDefense, and PlusCBD Pet brands in the health care market sector, including nutraceutical, beauty care, specialty foods, and pet products through its websites, elect distributors, brick and mortar retailers, and select e-tailers. It is also developing cannabinoids intended to treat medical indications, including CVSI-007 that combines CBD and nicotine for the treatment of smokeless tobacco use and addiction. The company was formerly known as CannaVest Corp. and changed its name to CV Sciences, Inc. in January 2016. CV Sciences, Inc. was incorporated in 2010 and is based in San Diego, California.

About Zymeworks

Zymeworks Inc., a clinical-stage biopharmaceutical company, discovers, develops, and commercializes biotherapeutics for the treatment of cancer. The company's lead product candidates include zanidatamab, a human epidermal growth factor receptor 2 (HER2) that is in Phase 1, Phase 2, and Phase 3 clinical trials, including certain ongoing pivotal clinical trials; and zanidatamab zovodotin, a HER2 -targeted antibody-drug conjugate that is in Phase 2 clinical trial for the treatment of advanced or metastatic HER2-expressing tumors. It also develops a pipeline of preclinical product candidates and discovery-stage programs in oncology, including immuno-oncology agents and other therapeutic areas. Zymeworks Inc. has strategic partnerships and collaborations with BeiGene, Ltd.; Celgene Corporation; Celgene Alpine Investment Co. LLC; GlaxoSmithKline Intellectual Property Development Limited; Daiichi Sankyo Co., Ltd.; Janssen Biotech, Inc.; LEO Pharma A/S; Iconic Therapeutics, Inc.; Merck Sharp & Dohme Research GmbH; and Atreca, Inc. Zymeworks Inc. was incorporated in 2003 and is based in Middletown, Delaware.