Cereplast (OTCMKTS:CERPQ) versus PureCycle Technologies (NASDAQ:PCT) Critical Analysis

PureCycle Technologies (NASDAQ:PCT) and Cereplast (OTCMKTS:CERPQ) are both small-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for PureCycle Technologies and Cereplast, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PureCycle Technologies	0	1	3	0	2.75
Cereplast	0	0	0	0	0.00

PureCycle Technologies currently has a consensus target price of $12.50, indicating a potential upside of 16.28%. Given PureCycle Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe PureCycle Technologies is more favorable than Cereplast.

Valuation & Earnings

This table compares PureCycle Technologies and Cereplast”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PureCycle Technologies	N/A	N/A	-$101.71 million	($1.50)	-7.17
Cereplast	N/A	N/A	N/A	N/A	N/A

Volatility & Risk

PureCycle Technologies has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Cereplast has a beta of 3.04, meaning that its share price is 204% more volatile than the S&P 500.

Insider & Institutional Ownership

63.0% of PureCycle Technologies shares are owned by institutional investors. 11.4% of PureCycle Technologies shares are owned by insiders. Comparatively, 1.1% of Cereplast shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares PureCycle Technologies and Cereplast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PureCycle Technologies	N/A	-52.63%	-20.69%
Cereplast	N/A	N/A	N/A

Summary

PureCycle Technologies beats Cereplast on 5 of the 8 factors compared between the two stocks.

About PureCycle Technologies

PureCycle Technologies, Inc. engages in the production of recycled polypropylene (PP). The company holds a license for restoring waste PP into ultra-pure recycled polypropylene resin that has multiple applications, including packaging and labeling for consumer products, piping, ropes, cabling, and plastic parts for various industries. Its recycling process separates color, odor, and other contaminants from plastic waste feedstock to transform it into virgin-like resin. The company was founded in 2015 and is headquartered in Orlando, Florida.

About Cereplast

Cereplast, Inc. does not have significant operation. Previously, it was involved in the development and are commercialization of bio-based resins. The company was incorporated in 2001 and is based in Zhengzhou, China.