Verrica Pharmaceuticals (VRCA) AI Stock Analysis

• Market Cap: $42.52M
• Dividend Yield: N/A
• Average Volume (3M): 196.79K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.78
• Revenue Growth: 234.73%
• EPS Growth: 81.16%
• Country: US
• Employees: 71
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.03
• Shares Outstanding: 9,490,035
• 10 Day Avg. Volume: 75,950
• 30 Day Avg. Volume: 196,792
• PEG Ratio: 0.00
• Price to Book (P/B): -3.68
• Price to Sales (P/S): 4.79
• P/FCF Ratio: -0.59
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 1.80
• Enterprise Value/Gross Profit: 1.96
• Enterprise Value/Ebitda: -3.39
• 1Y Price Target: $19.00
• Price Target Upside: 372.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: $4.50 ▲(11.94% Upside)

Verrica Pharmaceuticals' overall stock score is primarily impacted by its poor financial performance, characterized by declining revenues and negative equity. While the earnings call provided some positive developments, such as growth in YCANTH dispensations and strategic partnerships, these are overshadowed by the company's financial instability. Technical analysis suggests a bearish trend, and the valuation metrics are unattractive due to the negative P/E ratio.

Positive Factors

Regulatory Progress

Positive FDA feedback on VP-315's Phase III development enhances the company's pipeline credibility and potential future revenue streams.

Revenue Growth

The significant increase in revenue from Q3 2024 to Q3 2025 indicates strong market acceptance and potential for sustained growth.

Strategic Partnerships

Strategic partnerships with companies like Torii provide financial support and enhance market reach, aiding long-term growth.

Negative Factors

Financial Instability

Negative equity and high leverage indicate financial distress, which could limit the company's ability to invest in growth opportunities.

Cash Flow Challenges

Negative cash flows suggest insufficient cash generation to cover operational costs, posing risks to long-term sustainability.

Extended EU Filing Timeline

Delayed EU filing for YCANTH could postpone potential revenue streams and market expansion, impacting growth prospects.

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 Pharmaceuticals generates revenue through the commercialization of its products, particularly once they receive regulatory approval and enter the market. The company's primary revenue stream is expected to come from the sales of its lead product, VP-102, upon successful launch. Additionally, Verrica may engage in partnerships with larger pharmaceutical companies, which could involve upfront payments, milestone payments based on development progress, and royalties on sales, thus providing multiple avenues for revenue generation. The company also looks to secure grants and funding opportunities for research and development, which could supplement its earnings as it advances its product pipeline.

Verrica Pharmaceuticals Financial Statement Overview

Summary

Verrica Pharmaceuticals is facing significant financial challenges, including declining revenues, persistent losses, negative equity, and high leverage. The company is experiencing negative cash flows, posing substantial risks to its financial health.

Income Statement

Verrica Pharmaceuticals shows a declining revenue trend over recent years, with total revenue dropping from $12 million in 2021 to $7.57 million in 2024. The company has been consistently operating at a loss, with a negative EBIT and net profit margin, which are concerning for long-term profitability. Despite a slight increase in revenue from 2023 to 2024, the overall trend reveals financial instability and high operational expenses relative to revenue.

Balance Sheet

The balance sheet reveals significant financial instability, with a negative stockholders' equity in 2024, indicating that liabilities exceed assets. The debt-to-equity ratio is undefined due to negative equity, signaling high leverage and potential solvency issues. The equity ratio is also negative, further highlighting financial distress and the risk of insolvency.

Cash Flow

Verrica Pharmaceuticals faces persistent negative operating and free cash flows, with operating cash flow deteriorating significantly from 2023 to 2024. The free cash flow to net income ratio is unfavorable, indicating insufficient cash generation to cover losses. Although financing cash flows have been positive, they are primarily used to cover operational deficits rather than growth investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.83M	7.57M	5.12M	9.03M	12.00M	0.00
Gross Profit	28.33M	4.83M	4.38M	8.31M	11.53M	-229.00K
EBITDA	-16.39M	-65.90M	-62.20M	-21.60M	-30.31M	-39.43M
Net Income	-26.01M	-76.58M	-67.00M	-24.49M	-35.08M	-45.50M
Balance Sheet
Total Assets	40.90M	54.13M	81.60M	44.72M	80.13M	74.15M
Cash, Cash Equivalents and Short-Term Investments	21.10M	46.33M	69.55M	34.27M	70.35M	65.47M
Total Debt	35.74M	45.94M	45.51M	1.53M	43.41M	37.21M
Total Liabilities	57.94M	63.99M	61.83M	4.69M	47.52M	41.17M
Stockholders Equity	-17.04M	-9.86M	19.76M	40.03M	32.60M	32.99M
Cash Flow
Free Cash Flow	-29.10M	-60.95M	-38.94M	-18.95M	-28.46M	-31.68M
Operating Cash Flow	-29.10M	-60.93M	-38.58M	-18.65M	-27.58M	-30.21M
Investing Cash Flow	8.00K	-19.00K	-362.00K	54.04M	-998.00K	-3.58M
Financing Cash Flow	27.23M	37.73M	74.21M	-16.87M	33.65M	35.23M

Verrica Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Neutral. The current price of 4.02 is above the 20-day moving average (MA) of 3.73, below the 50-day MA of 4.08, and below the 200-day MA of 5.48, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 51.74 is Neutral, neither overbought nor oversold. The STOCH value of 69.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VRCA.

Verrica Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
VRCA	49 Neutral	$42.52M	―	―	―	234.73%	81.16%
EVAX	49 Neutral	$30.82M	―	―	―	4455.07%	77.31%
ELUT	45 Neutral	$39.00M	-0.87	―	―	-14.92%	72.81%
LVTX	44 Neutral	$42.75M	-1.54	-101.50%	―	-32.06%	16.38%
GBIO	39 Underperform	$35.36M	-0.48	-80.81%	―	-17.82%	57.32%

Verrica Pharmaceuticals Corporate Events

Verrica Pharmaceuticals Reports Q3 2025 Earnings

Verrica Pharmaceuticals Inc. is a dermatology therapeutics company based in West Chester, PA, specializing in the development and commercialization of treatments for skin diseases. The company recently reported its earnings for the quarter ended September 30, 2025, highlighting significant financial developments and strategic milestones. Verrica Pharmaceuticals reported total revenue of $14.3 million for the third quarter of 2025, a substantial increase from a negative revenue position in the same period last year. This growth was driven by product revenue from YCANTH (VP-102) and milestone payments from its collaboration with Torii Pharmaceutical Co., Ltd. Despite the revenue growth, the company posted a net loss of $274,000 for the quarter, a significant improvement from the $22.9 million loss in the previous year. The company continues to face financial challenges, with a stockholders’ deficit of $17 million and cash and cash equivalents of $21.1 million as of September 30, 2025. Verrica Pharmaceuticals remains focused on securing additional capital to support its operations and meet its financial obligations. The management is optimistic about future growth, driven by strategic collaborations and the ongoing commercialization of its dermatological products.

Verrica Pharmaceuticals’ Earnings Call Highlights Growth and Strategic Moves

Verrica Pharmaceuticals’ recent earnings call conveyed a positive sentiment, highlighting significant growth in YCANTH sales, strategic partnerships, and improved financial performance. However, the company acknowledged concerns regarding future cash flow and a reduction in research and development expenses.