Verrica Pharmaceuticals (VRCA) AI Stock Analysis

• Market Cap: $79.72M
• Dividend Yield: N/A
• Average Volume (3M): 535.16K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.97
• Revenue Growth: -19.45%
• EPS Growth: 31.22%
• Country: US
• Employees: 71
• Sector: Healthcare
• Sector Strength: 40
• Industry: Biotechnology
• EPS (TTM): -0.10
• Shares Outstanding: 92,490,990
• 10 Day Avg. Volume: 1,092,064
• 30 Day Avg. Volume: 535,160
• 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: 0.77
• Enterprise Value/Revenue: 1.62
• Enterprise Value/Gross Profit: 11.87
• Enterprise Value/Ebitda: -0.22
• 1Y Price Target: $2.50
• Price Target Upside: 204.88% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 54 Neutral
• Price Target: $1.00 ▲(21.95%Upside)

Verrica Pharmaceuticals' overall score is primarily impacted by its financial instability and high leverage. However, positive corporate events and strong technical indicators offer some optimism for potential recovery, albeit with significant risks.

Positive Factors

Financial Performance

VRCA received an immediate $8MM capital inflow due to the advancement of a milestone related to Ycanth's phase 3 program for common warts.

Product Demand

Growing demand and the expected discontinuation of compounded cantharidin in 2024 should drive demand-based sales increase in 2025.

Sales Growth

YCANTH reflects accelerating volume growth, up 16.7% over the previous quarter, which is impressive given the company's recent restructuring and reduced commercial footprint.

Negative Factors

Financial Concerns

There remains a significant financial overhang and short runway to fund operations.

Liquidity Issues

The Neutral rating is maintained due to concerns about precarious liquidity in a challenging market, pending more clarity on Verrica's strategy to achieve breakeven.

Market Challenges

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. is a dermatology therapeutics company focused on developing and commercializing treatments for skin diseases. The company primarily operates in the healthcare and pharmaceutical sectors, offering innovative solutions to address unmet medical needs in dermatology. Verrica's core product is VP-102, a proprietary topical therapy aimed at treating molluscum contagiosum, a common and highly contagious skin condition.

How the Company Makes Money

Verrica Pharmaceuticals makes money through the development and commercialization of dermatological treatments, with a focus on its lead product candidate, VP-102. The company's revenue model relies on the successful approval and market launch of VP-102, as well as potential licensing agreements and partnerships with other pharmaceutical entities. Verrica aims to generate revenue by selling its products directly to healthcare providers or through partnerships with distributors. Additionally, the company may leverage strategic collaborations to expand its market reach and enhance its product offerings.

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
EBITDA	-56.36M	-65.90M	-62.20M	-21.60M	-30.31M	-39.43M
Net Income	-65.99M	-76.58M	-67.00M	-27.68M	-38.90M	-45.50M
Balance Sheet
Total Assets	42.18M	54.13M	81.60M	44.72M	80.13M	74.15M
Cash, Cash Equivalents and Short-Term Investments	29.59M	46.33M	69.55M	34.27M	70.35M	65.47M
Total Debt	14.62M	45.94M	45.51M	1.53M	43.41M	35.31M
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: 0.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 0.82 is above the 20-day moving average (MA) of 0.64, above the 50-day MA of 0.58, and above the 200-day MA of 0.80, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 68.11 is Neutral, neither overbought nor oversold. The STOCH value of 87.79 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
VRCA	54 Neutral	$79.72M	―	-1546.58%	―	-19.45%	31.22%
PDSB	50 Neutral	$58.05M	―	-119.22%	―	―	25.51%
Sector *	49 Neutral	AU$2.52B	3.19	-57.47%	2.78%	36.73%	13.67%
GANX	46 Neutral	$50.31M	―	-290.21%	―	-100.00%	44.28%
PMVP	40 Underperform	$62.34M	―	-32.66%	―	―	21.33%
STRO	38 Underperform	$62.57M	―	-679.15%	―	-56.88%	-57.57%

Verrica Pharmaceuticals Corporate Events

Verrica Pharmaceuticals Amends Collaboration for YCANTH Trial

On June 27, 2025, Verrica Pharmaceuticals amended its collaboration with Torii Pharmaceutical to initiate a global Phase 3 clinical trial for YCANTH® to treat common warts. Torii will provide an $8 million milestone payment and fund the first $40 million of the trial costs. The amendment also includes a $10 million payment if YCANTH is approved for molluscum contagiosum in Japan. This strategic move aims to expand YCANTH’s market presence and strengthen Verrica’s financial position, with the first patient dosing expected in the fourth quarter of 2025.

The most recent analyst rating on (VRCA) stock is a Buy with a $12.00 price target. To see the full list of analyst forecasts on Verrica Pharmaceuticals stock, see the VRCA Stock Forecast page.

Verrica Pharmaceuticals Amends Credit Agreement with OrbiMed

On June 10, 2025, Verrica Pharmaceuticals Inc. entered into a sixth amendment and waiver to its Credit Agreement with OrbiMed Royalty & Credit Opportunities IV, LP and other lenders. The amendment includes a waiver of certain covenants related to financial statement qualifications for the quarters ending June 30, 2025, and September 30, 2025, as well as the year ending December 31, 2025. This move allows Verrica Pharmaceuticals to avoid a ‘going concern’ qualification, potentially stabilizing its financial outlook and reassuring stakeholders about its operational continuity.

The most recent analyst rating on (VRCA) stock is a Buy with a $12.00 price target. To see the full list of analyst forecasts on Verrica Pharmaceuticals stock, see the VRCA Stock Forecast page.

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.