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Verrica Pharmaceuticals
(NASDAQ:VRCA)
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Rating:50Neutral
Price Target:
$4.00
▼(-19.03% Downside)
Action:Reiterated
Date:08/29/26
VRCA’s score is held back primarily by weak financial performance—ongoing losses, negative cash flow, and reduced equity cushion—despite attractive gross margins. Technicals are mixed (short-term strength but still below longer-term averages). The earnings call adds moderate support via improving YCANTH momentum and nondilutive financing/funding progress, but liquidity and execution remain key risks. Valuation is constrained by a negative P/E and no dividend yield.
Positive Factors
YCANTH commercial momentum
Rising YCANTH prescriptions and revenue indicate improving prescriber adoption and patient demand for the company’s lead commercial product. If this trajectory persists, greater scale can strengthen the commercial platform and help absorb fixed selling and administrative costs over the next several quarters.
Negative Factors
Persistent unprofitability
The company’s high product margin has not yet translated into sustainable earnings because the current revenue base remains insufficient to cover operating costs. Continued net losses reduce internally generated capital, constrain strategic flexibility, and make successful commercial scaling increasingly important to the long-term model.
Read all positive and negative factors
Positive Factors
Negative Factors
YCANTH commercial momentum
Rising YCANTH prescriptions and revenue indicate improving prescriber adoption and patient demand for the company’s lead commercial product. If this trajectory persists, greater scale can strengthen the commercial platform and help absorb fixed selling and administrative costs over the next several quarters.
Read all positive factors
Verrica Pharmaceuticals (VRCA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$68.89M
Dividend YieldN/A
Average Volume (3M)48.17K
Price to Earnings (P/E)―
Beta (1Y)1.73
Revenue Growth106.21%
EPS Growth79.84%
CountryUS
Employees76
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-1.74
Shares Outstanding17,178,785
10 Day Avg. Volume39,440
30 Day Avg. Volume48,166
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)3.58
Price to Sales (P/S)2.49
P/FCF Ratio-5.02
Enterprise Value/Market Cap1.76
Enterprise Value/Revenue3.99
Enterprise Value/Gross Profit4.65
Enterprise Value/Ebitda-4.54
Forecast
1Y Price Target
$13.67Price Target Upside176.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)-2.03
Revenue Forecast (FY)$24.88M
Verrica Pharmaceuticals Business Overview & Revenue Model
Company Description
Verrica Pharmaceuticals Inc., a dermatology therapeutics company, engages in the development and commercialization of medications for the treatment of dermatologic diseases in the United States. The company offers YCANTH (VP-102) a drug-device com...
How the Company Makes Money
Verrica primarily makes money by selling its prescription dermatology product, YCANTH® (cantharidin) topical solution, in the U.S. Revenue is generated when YCANTH is purchased and reimbursed through healthcare channels (e.g., specialty distributi...
Verrica Pharmaceuticals Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Neutral
The call presents a mix of clear commercial momentum for YCANTH (robust unit growth, quarter-over-quarter revenue gains, new international distribution, and strong trial progress) and encouraging clinical signals (VP-315 Phase II abscopal effects and active Phase III enrollment for common warts). Offsetting these positives are sizable year-over-year revenue decline driven by last year’s one-time milestone, substantial GAAP and non-GAAP losses, materially higher R&D and SG&A expense, a legal settlement charge, and a relatively modest cash balance that makes the company reliant on a conditional credit facility. Management’s nondilutive financing and Torii’s substantial trial funding materially de-risk near-term liquidity and program funding, but financial outcomes remain contingent on milestone achievement, careful draw decisions, and successful trial readouts.Positive Updates
YCANTH Unit and Revenue Growth
Dispensed applicator units reached 19,626 in Q2 2026, up >28% quarter-over-quarter; U.S. YCANTH net product revenue was $5.1 million, an increase of 18.7% versus Q1 2026. Management cited accelerating prescriber adoption and strong demand from commercially insured patients supported by co-pay assistance.
Negative Updates
Year-over-Year Revenue Decline (One-Time Milestone Impact)
Total revenue for Q2 2026 was $5.9 million versus $12.7 million in Q2 2025, a decline of ~53.5% YoY driven largely by an $8 million one-time milestone recognized in Q2 2025 (license & collaboration revenue was $0.8M in Q2 2026 vs $8.2M in Q2 2025).
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Q2-2026 Updates
Positive
Negative
YCANTH Unit and Revenue Growth
Dispensed applicator units reached 19,626 in Q2 2026, up >28% quarter-over-quarter; U.S. YCANTH net product revenue was $5.1 million, an increase of 18.7% versus Q1 2026. Management cited accelerating prescriber adoption and strong demand from commercially insured patients supported by co-pay assistance.
Read all positive updates
Company Guidance
Management outlined financial and development guidance and milestones including a nondilutive credit facility of up to $27.5M ($12.5M available immediately, $15M contingent on revenue/growth/operational milestones targeted before end‑2026), no scheduled principal/interest payments until maturity (Dec 2030), priced at SOFR +8% (4.5% floor) with a 1% prepayment fee and a 16% IRR catch‑up, secured seniorly; assuming full availability, cash of $11.2M (June 30, 2026) plus the facility could extend runway into 2028. Q2 2026 operational and financial metrics included total revenue $5.9M (U.S. YCANTH net product revenue $5.1M, up 18.7% QoQ; $0.8M license/collaboration), 19,626 dispensed applicator units (up >28% QoQ and >12% vs Q4 2025), gross product margin ~91.5%, cost of product revenue $0.4M, R&D $6.0M, SG&A $10.3M, a $1.7M net legal settlement expense, GAAP net loss $13.2M ($0.62/sh) and non‑GAAP net loss $10.2M ($0.48/sh). Development guidance: Torii is funding the first $40M (≈90% of current budget) of the global Phase III common‑warts program with overall costs split 50/50, COVE‑3 has dosed first U.S. and Japanese patients while COVE‑2 and long‑term follow‑up COVE‑4 are enrolling, and top‑line data are expected mid‑2027; international expansion includes an Israel distribution deal where Verrica will receive 60% of net selling price plus up to $8.2M in milestones. VP‑315 Phase II highlights noted 14 untreated nontarget BCC lesions across 9 subjects showed a 67% mean size reduction with 3 complete histologic clearances, and the company is preparing for Phase III.Verrica Pharmaceuticals Financial Statement Overview
Summary
Income Statement
24
Negative
Balance Sheet
46
Neutral
Cash Flow
31
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 30.32M | 35.58M | 7.57M | 5.12M | 9.03M | 12.00M |
| Gross Profit | 26.04M | 32.14M | 4.83M | 4.38M | 8.31M | 11.53M |
| EBITDA | -26.68M | -9.36M | -65.90M | -62.20M | -21.60M | -30.31M |
| Net Income | -31.18M | -17.89M | -76.58M | -67.00M | -24.49M | -35.08M |
Balance Sheet | ||||||
| Total Assets | 36.02M | 47.13M | 54.13M | 81.60M | 44.72M | 80.13M |
| Cash, Cash Equivalents and Short-Term Investments | 11.20M | 30.15M | 46.33M | 69.55M | 34.27M | 70.35M |
| Total Debt | 1.81M | 1.63M | 45.94M | 45.51M | 1.53M | 43.41M |
| Total Liabilities | 31.71M | 22.39M | 63.99M | 61.83M | 4.69M | 47.52M |
| Stockholders Equity | 4.31M | 24.74M | -9.86M | 19.76M | 40.03M | 32.60M |
Cash Flow | ||||||
| Free Cash Flow | -13.35M | -17.63M | -60.95M | -38.94M | -18.95M | -28.46M |
| Operating Cash Flow | -13.35M | -17.63M | -60.93M | -38.58M | -18.65M | -27.58M |
| Investing Cash Flow | 0.00 | 0.00 | -19.00K | -362.00K | 54.04M | -998.00K |
| Financing Cash Flow | 9.41M | 1.45M | 37.73M | 74.21M | -16.87M | 33.65M |
Verrica Pharmaceuticals Technical Analysis
Negative
4.94
Price Trends
4.84
Negative
5.35
Negative
5.93
Negative
Market Momentum
-0.23
Positive
34.72
Neutral
6.72
Positive
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 4.94 is above the 20-day moving average (MA) of 4.42, above the 50-day MA of 4.84, and below the 200-day MA of 5.93, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 34.72 is Neutral, neither overbought nor oversold. The STOCH value of 6.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VRCA.
Verrica Pharmaceuticals Risk Analysis
Verrica Pharmaceuticals disclosed 69 risk factors in its most recent earnings report. Verrica Pharmaceuticals reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Verrica Pharmaceuticals Peers Comparison
UnderperformOutperform
Sector (51)
VRCA
Verrica Pharmaceuticals
4.01
-0.09
-2.20%
ELUT
Elutia
0.79
-0.12
-12.94%
EVAX
Evaxion Biotech
3.00
-3.26
-52.08%
LIMN
Liminatus Pharma
3.45
-67.05
-95.11%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.