Verrica Pharmaceuticals (VRCA) AI Stock Analysis

• Market Cap: $56.39M
• Dividend Yield: N/A
• Average Volume (3M): 50.72K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.95
• Revenue Growth: 5.72%
• EPS Growth: 55.79%
• Country: US
• Employees: 71
• Sector: Healthcare
• Sector Strength: 47
• Industry: Biotechnology
• EPS (TTM): 0.02
• Shares Outstanding: 9,445,768
• 10 Day Avg. Volume: 58,116
• 30 Day Avg. Volume: 50,724
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 5.02
• Enterprise Value/Gross Profit: 5.73
• Enterprise Value/Ebitda: -1.88
• 1Y Price Target: $20.00
• Price Target Upside: 253.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 46 Neutral
• Price Target: $6.00 ▲(6.01% Upside)

Verrica Pharmaceuticals' overall stock score is primarily impacted by its poor financial performance, characterized by declining revenues and negative equity. While recent earnings call highlights and corporate events show potential for growth, the financial instability and bearish technical indicators weigh heavily on the stock's attractiveness.

Positive Factors

Financial Strategy

Non-dilutive financing was secured, providing operational funding through 2025 and into 2026.

Product Demand

The volume of dispensed Ycanth applicator units increased by approximately 33%, indicating strong product demand.

Sales Growth

Ycanth sales increased by 33%, slightly surpassing market expectations.

Negative Factors

Financial Overhang

There is a need for significantly more sales growth to address the company's financial overhang and funding needs.

Going Concern

A 'going concern' remains despite the recent financing achievements.

Profitability Concerns

The company is currently not profitable, making a long-term financial solution necessary.

Verrica Pharmaceuticals Business Overview & Revenue Model

Company Description

Verrica Pharmaceuticals (VRCA) is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapeutics for the treatment of skin diseases. The company primarily targets dermatological conditions, with its lead product candidate, VP-102, designed for the treatment of common skin conditions like warts. Verrica operates in the biopharmaceutical sector, emphasizing the development of topical treatments that leverage its proprietary formulation technologies.

How the Company Makes Money

Verrica Pharmaceuticals generates revenue primarily through the commercialization of its therapeutic products, particularly once they receive regulatory approval. The company may also generate income from collaborations and partnerships with larger pharmaceutical companies that seek to co-develop or market its products. Revenue streams include product sales, milestone payments from partnerships, and potentially royalties from sales of partnered products. As the company advances its pipeline candidates, successful product launches and market penetrations will be critical factors contributing to its earnings.

Verrica Pharmaceuticals Financial Statement Overview

Summary

Verrica Pharmaceuticals is experiencing significant financial challenges with persistent losses, declining revenues, 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	14.70M	7.57M	5.12M	9.03M	12.00M	0.00
Gross Profit	12.88M	5.71M	4.38M	8.31M	11.53M	-229.00K
EBITDA	-39.34M	-65.90M	-62.20M	-21.60M	-30.31M	-39.43M
Net Income	-48.60M	-76.58M	-67.00M	-24.49M	-35.08M	-45.50M
Balance Sheet
Total Assets	39.11M	54.13M	81.60M	44.72M	80.13M	74.15M
Cash, Cash Equivalents and Short-Term Investments	15.40M	46.33M	69.55M	34.27M	70.35M	65.47M
Total Debt	38.89M	45.94M	45.51M	1.53M	43.41M	37.21M
Total Liabilities	56.59M	63.99M	61.83M	4.69M	47.52M	41.17M
Stockholders Equity	-17.48M	-9.86M	19.76M	40.03M	32.60M	32.99M
Cash Flow
Free Cash Flow	-47.36M	-60.95M	-38.94M	-18.95M	-28.46M	-31.68M
Operating Cash Flow	-47.34M	-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	30.82M	37.73M	74.21M	-16.87M	33.65M	35.23M

Verrica Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.66
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRCA, the sentiment is Negative. The current price of 5.66 is below the 20-day moving average (MA) of 5.99, below the 50-day MA of 6.59, and below the 200-day MA of 6.63, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 42.38 is Neutral, neither overbought nor oversold. The STOCH value of 33.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$7.83B	-0.18	-40.10%	2.29%	21.46%	-2.03%
KRON	51 Neutral		―		―	21.15%	46.44%
PDSB	50 Neutral	$60.16M	―	-156.16%	―	―	25.26%
VRCA	46 Neutral	$56.39M	―	-1546.58%	―	5.72%	55.79%
GANX	46 Neutral	$69.02M	―	-240.21%	―	―	49.82%
STRO	40 Neutral	$76.25M	―	-347.64%	―	-38.31%	-36.91%
PMVP	40 Underperform	$76.31M	―	-45.57%	―	―	-61.41%

Verrica Pharmaceuticals Corporate Events

Verrica Pharmaceuticals Regains Nasdaq Compliance

On August 8, 2025, Verrica Pharmaceuticals announced it had regained compliance with Nasdaq listing requirements. The company reported $12.7 million in revenue for Q2 2025, driven by strong growth in YCANTH sales and milestone payments from Torii Pharmaceutical. Verrica is preparing for a Phase 3 program for VP-315 for basal cell carcinoma and anticipates further growth through strategic partnerships and regulatory approvals. A reverse stock split was also effected on July 24, 2025, reducing the number of shares outstanding.

Verrica Pharmaceuticals Implements Reverse Stock Split

On July 24, 2025, Nasdaq notified Verrica Pharmaceuticals that its securities were subject to delisting due to non-compliance with the Minimum Bid Price Requirement. The company implemented a 1-for-10 reverse stock split to increase its stock price, which began trading on a split-adjusted basis on July 25, 2025. As of July 29, 2025, the stock price was $6.24, and the company plans to request a compliance determination after ten days of maintaining the required bid price.

Verrica Pharmaceuticals Announces Reverse Stock Split

On July 22, 2025, Verrica Pharmaceuticals Inc. filed a Certificate of Amendment to implement a 1-for-10 reverse stock split, effective July 24, 2025. This move, approved by stockholders on June 5, 2025, will proportionately adjust stock options and warrants, affecting all stockholders equally without changing percentage ownership. The company’s common stock will trade on a split-adjusted basis on The Nasdaq Global Market starting July 25, 2025, reducing the number of outstanding shares from approximately 92.5 million to 9.25 million.

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.

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.

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.