Verrica Pharmaceuticals (VRCA) AI Stock Analysis

• Market Cap: $108.40M
• Dividend Yield: N/A
• Average Volume (3M): 135.57K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.27
• Revenue Growth: 234.73%
• EPS Growth: 81.16%
• Country: US
• Employees: 71
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.57
• Shares Outstanding: 17,178,785
• 10 Day Avg. Volume: 153,332
• 30 Day Avg. Volume: 135,566
• PEG Ratio: 0.06
• Price to Book (P/B): 3.58
• Price to Sales (P/S): 2.49
• P/FCF Ratio: -5.02
• Enterprise Value/Market Cap: 0.36
• Enterprise Value/Revenue: 1.09
• Enterprise Value/Gross Profit: 1.16
• Enterprise Value/Ebitda: -4.05
• 1Y Price Target: $20.00
• Price Target Upside: 216.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): -1.3
• Revenue Forecast (FY): $26.43M

• Rating: 47 Neutral
• Price Target: $6.00 ▼(-4.91% Downside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

The score is held down primarily by persistent losses and ongoing negative free cash flow despite improved revenue and strong gross margins. A healthier balance sheet and a generally positive earnings-call outlook (product momentum and regulatory progress) provide support, while technical signals and valuation are mixed due to negative earnings and only modest momentum.

Positive Factors

Product Adoption / Revenue Growth

Rapid and sustained growth in dispensed YCANTH units indicates strong provider adoption and patient demand, supporting recurring prescription volumes. This durable adoption momentum underpins sustainable revenue expansion over the next 2–6 months as commercialization scale and physician familiarity increase.

High Gross Margins

Exceptionally high gross margins create a favorable cost structure where incremental sales largely drop to the operating line. This structural margin advantage for a physician‑administered topical product supports path to profitability as SG&A is already being reduced and sales scale further.

Balance Sheet & Partnership Cash

Material improvement in leverage and positive equity reduce near‑term refinancing risk and provide optionality. Coupled with non‑dilutive milestone cash from partner Torii, the funding runway and ability to advance late‑stage programs are materially strengthened versus prior years.

Negative Factors

Negative Cash Flow

Persistent negative operating and free cash flow indicates the business still relies on external financing or partnerships to fund operations and development. Continued cash burn constrains reinvestment, raises dilution and execution risk if product growth stalls or milestone receipts lapse.

Ongoing Net Losses

Meaningful net losses despite revenue rebound show profitability hasn't been achieved; negative returns on equity persist. If operating costs or R&D rebound, losses could continue to erode improved capital position and limit ability to self‑fund pipeline advancement.

Geographic Timing Risk & Product Concentration

A delayed EU filing slows international revenue diversification and prolongs concentration on a single marketed product in the U.S. Combined with seasonality and occasional softer pull‑through, this concentration elevates revenue volatility and execution risk over the medium term.

Verrica Pharmaceuticals Business Overview & Revenue Model

Company Description

Verrica Pharmaceuticals Inc., a dermatology therapeutics company, develops and commercializes treatments for people with skin diseases in the United States. The company's lead product candidate includes VP-102 for the treatment of molluscum contagiosum; that has completed Phase II clinical trial for the treatment of external genital warts; and which is in Phase II clinical trial for treating common warts. It is also developing cantharidin-based product candidate, VP-103 for treating plantar warts. The company has a license and collaboration agreement with Torii Pharmaceutical Co., Ltd. for the development and commercialization of its product candidates for the treatment of molluscum contagiosum and common warts in Japan, including VP-102; and a license agreement with Lytix Biopharma AS to develop and commercialize LTX-315 for dermatological oncology indications. Verrica Pharmaceuticals Inc. was incorporated in 2013 and is headquartered in West Chester, Pennsylvania.

How the Company Makes Money

Verrica primarily makes money by selling YCANTH™ (cantharidin topical solution, 0.7%) in the United States. Revenue is generated from product sales made into the healthcare channel (e.g., sales to specialty distributors/wholesalers and/or specialty pharmacies) that supply prescribing and administering healthcare providers, and demand is driven by provider adoption and patient utilization for molluscum contagiosum. The company’s earnings are influenced by commercial execution (salesforce effectiveness and provider targeting), market access and reimbursement dynamics (coverage and patient out-of-pocket costs), and distribution and dispensing logistics that enable product availability. If Verrica enters licensing, co-promotion, or other commercial partnerships, those arrangements could add revenue via upfront payments, milestones, or royalties; specific partnership-derived revenue details are null if not publicly specified.

Verrica Pharmaceuticals Financial Statement Overview

Summary

Operational rebound with strong 2025 revenue growth and very high gross margin, plus a healthier balance sheet with low debt and positive equity. However, the company remains meaningfully loss-making and continues to post negative operating and free cash flow, keeping funding risk elevated.

Income Statement

Revenue rebounded strongly in 2025 ($35.6M, +15.4%) after several weaker years, and gross profitability is a clear strength with very high gross margin (2025: ~94%). However, the company remains meaningfully loss-making: 2025 net loss was ~$17.9M (about -50% net margin) and EBITDA was still negative. Results improved dramatically versus 2024’s very large losses, but profitability is not yet established and margins below gross profit remain pressured by operating costs.

Balance Sheet

Leverage improved substantially in 2025 with low total debt (~$1.6M) and a modest debt-to-equity level (~0.07), alongside positive equity (~$24.7M). This is a major step up from 2024, when equity was negative and leverage metrics were distorted. The key weakness is ongoing losses driving negative returns on equity (2025 ROE ~-0.72), which could erode the improved capital position if not reversed.

Cash Flow

Cash generation remains a primary concern. Operating cash flow and free cash flow were negative in every year shown, including 2025 (both about -$17.6M). While the cash burn improved materially versus 2024, free cash flow growth in 2025 was still negative (about -39%), highlighting continued funding needs. Free cash flow roughly tracked net losses, reinforcing that profitability and cash self-sufficiency have not been achieved.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	35.58M	7.57M	5.12M	9.03M	12.00M
Gross Profit	32.14M	4.83M	4.38M	8.31M	11.53M
EBITDA	-11.16M	-65.90M	-62.20M	-21.60M	-30.31M
Net Income	-17.89M	-76.58M	-67.00M	-24.49M	-35.08M
Balance Sheet
Total Assets	47.13M	54.13M	81.60M	44.72M	80.13M
Cash, Cash Equivalents and Short-Term Investments	30.15M	46.33M	69.55M	34.27M	70.35M
Total Debt	1.63M	45.94M	45.51M	1.53M	43.41M
Total Liabilities	22.39M	63.99M	61.83M	4.69M	47.52M
Stockholders Equity	24.74M	-9.86M	19.76M	40.03M	32.60M
Cash Flow
Free Cash Flow	-17.63M	-60.95M	-38.94M	-18.95M	-28.46M
Operating Cash Flow	-17.63M	-60.93M	-38.58M	-18.65M	-27.58M
Investing Cash Flow	0.00	-19.00K	-362.00K	54.04M	-998.00K
Financing Cash Flow	1.45M	37.73M	74.21M	-16.87M	33.65M

Verrica Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.31
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRCA, the sentiment is Positive. The current price of 6.31 is above the 20-day moving average (MA) of 5.74, below the 50-day MA of 6.65, and above the 200-day MA of 6.03, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 55.35 is Neutral, neither overbought nor oversold. The STOCH value of 76.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VRCA.

Verrica Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVAX	58 Neutral	$31.94M	-3.95	-61.62%	―	4455.07%	77.31%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
ELUT	51 Neutral	$43.98M	0.10	-225.83%	―	-14.92%	72.81%
VRCA	47 Neutral	$108.40M	-2.74	252.30%	―	234.73%	81.16%

Verrica Pharmaceuticals Corporate Events

Verrica Pharmaceuticals Adds Caligan Partner to Board

On December 26, 2025, Verrica Pharmaceuticals Inc. appointed Charles Frantzreb, a partner at therapeutics-focused investment firm Caligan Partners and a physician by training, to its Board of Directors as a Class III director, with a term running through the 2027 annual meeting of stockholders; his appointment stems from a securities purchase agreement with institutional investors and reflects Caligan’s direct governance role in the company. Separately, on December 23, 2025, the board’s Compensation Committee approved equity awards under Verrica’s 2018 Equity Incentive Plan, including a large, performance- and stock-price-contingent stock option grant to President and CEO Jayson Rieger and fully vested restricted stock units to Interim CFO John Kirby, moves aimed at strengthening long-term management incentives, addressing comparatively low insider ownership versus peers, and supporting retention amid recent financing activities and an expanded share base.

The most recent analyst rating on (VRCA) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Verrica Pharmaceuticals stock, see the VRCA Stock Forecast page.