Verrica Pharmaceuticals (VRCA) AI Stock Analysis

• Market Cap: $78.77M
• Dividend Yield: N/A
• Average Volume (3M): 286.59K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.53
• 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: 523,521
• 30 Day Avg. Volume: 286,589
• 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: 0.71
• Enterprise Value/Revenue: 1.80
• Enterprise Value/Gross Profit: 1.96
• Enterprise Value/Ebitda: -3.39
• 1Y Price Target: $19.00
• Price Target Upside: 139.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): -0.95
• Revenue Forecast (FY): $37.13M

• Rating: 54 Neutral
• Price Target: $8.50 ▲(7.32% Upside)

Verrica Pharmaceuticals' overall stock score is primarily impacted by its poor financial performance, characterized by declining revenues and negative equity. Despite positive technical indicators and strategic corporate events, the company's valuation remains a concern due to ongoing losses. The earnings call provided some optimism with growth in product dispensations and regulatory progress, but financial instability remains a significant risk.

Positive Factors

Regulatory Progress

The positive regulatory feedback in the EU for YCANTH reduces development costs and accelerates market entry, enhancing long-term growth potential.

Strategic Partnerships

The partnership with Torii Pharmaceuticals provides financial support and validates Verrica's products, strengthening its market position and revenue streams.

Financing and Cash Runway

The $50M financing deal extends Verrica's cash runway into mid-2027, supporting product development and enhancing financial stability.

Negative Factors

Financial Instability

Persistent financial instability, characterized by declining revenues and negative equity, poses a risk to long-term viability and operational capacity.

Negative Cash Flows

Negative cash flows indicate insufficient cash generation, limiting the company's ability to invest in growth and cover operational expenses.

High Leverage

High leverage and negative equity increase financial risk, potentially impacting the company's ability to secure future funding and manage debt.

Verrica Pharmaceuticals Business Overview & Revenue Model

Company Description

Verrica Pharmaceuticals (VRCA) is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative treatments for skin diseases. The company is primarily engaged in the dermatology sector, with a core focus on advancing therapies for conditions such as common warts and other skin-related ailments. Verrica's lead product candidate, VP-102, is a proprietary drug-device combination that utilizes a novel formulation of cantharidin for the treatment of warts, positioning the company as a key player in the dermatological therapeutics market.

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 severe financial challenges, with declining revenues, persistent losses, and negative equity. The company is highly leveraged with 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: Positive
• Last Price: 7.92
• 50DMA: Positive
• 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 7.92 is above the 20-day moving average (MA) of 6.48, above the 50-day MA of 4.96, and above the 200-day MA of 5.51, indicating a bullish trend. The MACD of 1.10 indicates Negative momentum. The RSI at 61.86 is Neutral, neither overbought nor oversold. The STOCH value of 53.57 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	$40.74M	―	―	―	4455.07%	77.31%
VRCA	54 Neutral	$78.77M	―	―	―	234.73%	81.16%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
ELUT	44 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 Secures $50M Financing Deal

On November 23, 2025, Verrica Pharmaceuticals announced a private placement financing agreement to raise approximately $50 million. This funding will be used to retire the company’s debt facility with OrbiMed, extend its cash runway into mid-2027, and support further development of its product pipeline, including the advancement of YCANTH and VP-315. The financing, expected to close on November 25, 2025, involves selling shares and warrants to institutional and accredited investors, with Caligan Partners gaining rights to appoint a board member. This strategic move aims to solidify Verrica’s financial position and enhance its market presence in dermatology therapeutics.