Verrica Pharmaceuticals (VRCA) AI Stock Analysis

• Market Cap: $55.59M
• Dividend Yield: N/A
• Average Volume (3M): 232.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.92
• Revenue Growth: -19.45%
• EPS Growth: 31.22%
• Country: US
• Employees: 71
• Sector: Healthcare
• Sector Strength: 44
• Industry: Biotechnology
• EPS (TTM): -0.10
• Shares Outstanding: 92,490,990
• 10 Day Avg. Volume: 213,321
• 30 Day Avg. Volume: 232,437
• PEG Ratio: 0.08
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.96
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 1.62
• Enterprise Value/Gross Profit: 11.87
• Enterprise Value/Ebitda: -0.22
• 1Y Price Target: $3.50
• Price Target Upside: 464.52% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 53 Neutral
• Price Target: $0.50 ▼(-19.35%Downside)

Verrica Pharmaceuticals' overall stock score is primarily impacted by its challenging financial performance, including persistent losses and high leverage. Positive developments from the earnings call and strong shareholder support offer some optimism, but valuation concerns and technical analysis suggest limited immediate upside potential.

Positive Factors

Market Strategy

Management's new commercial strategy, focusing on territories with high molluscum prevalence and strong insurance coverage, is expected to boost Ycanth's market presence.

Product Demand

The discontinuation of compounded cantharidin and Ycanth's effectiveness for painless lesion removal are driving increased demand.

Product Sales

Ycanth sales reached $3.4MM, marking a significant milestone after a company restructuring, with increased demand and improved inventory levels.

Negative Factors

Financial Concerns

A significant financial overhang and short runway to fund operations pose risks to the company's stability.

Liquidity Challenges

Concerns about precarious liquidity in a challenging market continue, pending more clarity on Verrica's strategy to achieve breakeven.

Tariff Concerns

Potential impacts of tariffs are a concern for the company, which could affect its financial performance.

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 primarily through the development and commercialization of dermatology therapeutics. The company's revenue model is centered on obtaining regulatory approval and commercializing its lead product candidate, VP-102. Revenue streams may include sales of VP-102 upon approval, potential partnerships with other pharmaceutical companies, and licensing agreements. Additionally, Verrica may seek to expand its revenue base through the development of other pipeline products and entering into strategic collaborations that can provide upfront payments, milestone payments, and royalties from partners.

Verrica Pharmaceuticals Financial Statement Overview

Summary

Verrica Pharmaceuticals faces significant financial challenges with declining revenues, persistent losses, negative equity, and high leverage. These issues pose substantial risks to its financial health, necessitating urgent strategic adjustments.

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
7.18M	7.57M	5.12M	9.03M	12.00M	0.00
	Gross Profit
5.15M	5.71M	4.38M	8.31M	11.53M	-229.00K
	EBIT
-55.45M	-65.92M	-65.76M	-21.30M	-30.91M	-40.18M
	EBITDA
-56.36M	-65.90M	-62.20M	-21.60M	-30.31M	-39.43M
	Net Income Common Stockholders
-65.99M	-76.58M	-67.00M	-27.68M	-38.90M	-45.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
29.59M	46.33M	69.55M	34.27M	70.35M	65.47M
	Total Assets
42.18M	54.13M	81.60M	44.72M	80.13M	74.15M
	Total Debt
14.62M	45.94M	45.51M	1.53M	43.41M	35.31M
	Net Debt
-14.97M	-390.00K	-24.04M	-32.75M	27.66M	24.63M
	Total Liabilities
60.75M	63.99M	61.83M	4.69M	47.52M	41.17M
	Stockholders Equity
-18.58M	-9.86M	19.76M	40.03M	32.60M	32.99M
Cash Flow		Free Cash Flow
-53.68M	-60.95M	-38.94M	-18.95M	-28.46M	-31.68M
	Operating Cash Flow
-53.66M	-60.93M	-38.58M	-18.65M	-27.58M	-30.21M
	Investing Cash Flow
-19.00K	-19.00K	-362.00K	54.04M	-998.00K	-3.58M
	Financing Cash Flow
34.33M	37.73M	74.21M	-16.87M	33.65M	35.23M

Verrica Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 0.62 is above the 20-day moving average (MA) of 0.59, above the 50-day MA of 0.52, and below the 200-day MA of 0.94, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 58.91 is Neutral, neither overbought nor oversold. The STOCH value of 80.00 is Negative, 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
Sector *	54 Neutral	$5.38B	3.40	-45.06%	3.28%	16.75%	-0.02%
VRCA	53 Neutral	$55.59M	―	-1546.58%	―	-19.45%	31.22%
KRON	51 Neutral	$54.26M	―	-59.49%	―	21.15%	46.44%
PDSB	50 Neutral	$76.79M	―	-119.22%	―	―	25.51%
GANX	46 Neutral	$56.60M	―	-290.21%	―	-100.00%	44.28%
STRO	43 Neutral	$70.91M	―	-679.15%	―	-56.88%	-57.57%
PMVP	40 Underperform	$61.82M	―	-32.66%	―	―	21.33%

Verrica Pharmaceuticals Corporate Events

Verrica Pharmaceuticals Holds Annual Stockholders Meeting

On June 5, 2025, Verrica Pharmaceuticals held its annual stockholders meeting where four proposals were considered. All three director nominees were elected, executive compensation was approved, KPMG LLP’s appointment as the accounting firm was ratified, and a potential reverse stock split was authorized, reflecting strong shareholder support for the company’s strategic decisions.

The most recent analyst rating on (VRCA) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Verrica Pharmaceuticals stock, see the VRCA Stock Forecast page.

Verrica Pharmaceuticals Announces Resignation of Chief Legal Officer

On April 22, 2025, Verrica Pharmaceuticals announced the resignation of Christopher G. Hayes from his roles as Chief Legal Officer, Chief Compliance Officer, and Corporate Secretary, effective April 30, 2025. In connection with his resignation, the company entered into a Release Agreement with Hayes, offering him a continuation of his base salary and health coverage for up to 12 months, highlighting the company’s commitment to ensuring a smooth transition.

Verrica Pharmaceuticals Appoints Dr. Corcoran as Director

On March 31, 2025, Verrica Pharmaceuticals Inc. appointed Dr. Gavin Corcoran as a Class I director, with his term expiring at the 2025 annual meeting of stockholders. Dr. Corcoran, who has extensive experience in the pharmaceutical industry, will receive stock options and an annual retainer as part of his compensation, aligning with the company’s policy for non-employee directors.