Eledon Pharmaceuticals (NASDAQ:ELDN) and Castle Biosciences (NASDAQ:CSTL) Critical Contrast

Eledon Pharmaceuticals (NASDAQ:ELDN) and Castle Biosciences (NASDAQ:CSTL) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Eledon Pharmaceuticals and Castle Biosciences, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eledon Pharmaceuticals	1	1	3	0	2.40
Castle Biosciences	1	1	7	0	2.67

Eledon Pharmaceuticals currently has a consensus target price of $9.67, suggesting a potential upside of 181.83%. Castle Biosciences has a consensus target price of $42.83, suggesting a potential upside of 107.32%. Given Eledon Pharmaceuticals’ higher possible upside, analysts clearly believe Eledon Pharmaceuticals is more favorable than Castle Biosciences.

Insider & Institutional Ownership

56.8% of Eledon Pharmaceuticals shares are owned by institutional investors. Comparatively, 92.6% of Castle Biosciences shares are owned by institutional investors. 9.6% of Eledon Pharmaceuticals shares are owned by insiders. Comparatively, 6.1% of Castle Biosciences shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Eledon Pharmaceuticals and Castle Biosciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eledon Pharmaceuticals	N/A	-116.97%	-41.91%
Castle Biosciences	-3.78%	-2.77%	-2.30%

Risk and Volatility

Eledon Pharmaceuticals has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Castle Biosciences has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Valuation & Earnings

This table compares Eledon Pharmaceuticals and Castle Biosciences”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eledon Pharmaceuticals	N/A	N/A	-$45.62 million	($0.77)	-4.45
Castle Biosciences	$344.23 million	1.82	-$24.16 million	($0.44)	-46.95

Castle Biosciences has higher revenue and earnings than Eledon Pharmaceuticals. Castle Biosciences is trading at a lower price-to-earnings ratio than Eledon Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Summary

Castle Biosciences beats Eledon Pharmaceuticals on 9 of the 13 factors compared between the two stocks.

About Eledon Pharmaceuticals

Eledon Pharmaceuticals, Inc. operates as a clinical stage biotechnology company. The company uses its immunology expertise in targeting the CD40 Ligand (CD40L, also called CD154) pathway to develop therapies to protect transplanted organs and prevent rejection, and to treat amyotrophic lateral sclerosis (ALS). The company's lead compound in development is tegoprubart, an IgG1 and anti-CD40L antibody with high affinity for CD40 Ligand, a biological target with therapeutic potential. It has a collaboration agreement with eGenesis, Inc. The company was formerly known as Novus Therapeutics, Inc. and changed its name to Eledon Pharmaceuticals, Inc. in January 2021. Eledon Pharmaceuticals, Inc. is headquartered in Irvine, California.

About Castle Biosciences

Castle Biosciences, Inc., a molecular diagnostics company, provides testing solutions for the diagnosis and treatment of dermatologic cancers, Barrett's esophagus, uveal melanoma, and mental health conditions. It offers DecisionDx-Melanoma, a risk stratification gene expression profile (GEP) test to identify the risk of metastasis for patients diagnosed with invasive cutaneous melanoma; DecisionDx-SCC, a proprietary risk stratification GEP test for patients with cutaneous squamous cell carcinoma; MyPath Melanoma, a test used for patients with difficult-to-diagnose melanocytic lesions; and TissueCypher, a spatial omics test to predict future development of high-grade dysplasia and/or esophageal cancer in patients with non-dysplastic, indefinite dysplasia, or low-grade dysplasia Barrett's esophagus. In addition, the company provides DecisionDx-UM test, a proprietary risk stratification GEP test that predicts the risk of metastasis for patients with uveal melanoma; and IDgenetix, a pharmacogenomic test that helps guide drug treatment for major depressive disorder, schizophrenia, bipolar disorder, anxiety disorders, social phobia, obsessive-compulsive personality disorder, post-traumatic stress disorder, and attention deficit hyperactivity disorder. It offers its products to skin cancer, gastroenterology, and mental health markets. The company was incorporated in 2007 and is headquartered in Friendswood, Texas.