Comparing Arch Therapeutics (ARTH) and Zynex (ZYXI)

Zynex (OTCMKTS: ZYXI) and Arch Therapeutics (OTCMKTS:ARTH) are both small-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Valuation and Earnings

This table compares Zynex and Arch Therapeutics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zynex $13.31 million 11.59 $60,000.00 $0.13 36.15
Arch Therapeutics N/A N/A -$7.78 million ($0.04) -8.75

Zynex has higher revenue and earnings than Arch Therapeutics. Arch Therapeutics is trading at a lower price-to-earnings ratio than Zynex, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Zynex and Arch Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zynex 0 1 0 0 2.00
Arch Therapeutics 0 0 2 1 3.33

Arch Therapeutics has a consensus target price of $3.00, suggesting a potential upside of 757.39%. Given Arch Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Arch Therapeutics is more favorable than Zynex.

Insider and Institutional Ownership

0.0% of Arch Therapeutics shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Zynex and Arch Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zynex 24.10% -248.78% 98.51%
Arch Therapeutics N/A -181.04% -96.16%

Risk & Volatility

Zynex has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Summary

Arch Therapeutics beats Zynex on 7 of the 12 factors compared between the two stocks.

Zynex Company Profile

Zynex, Inc. operates through the Electrotherapy and Pain Management Products segment. The Company conducts its business through its subsidiaries and the operating subsidiary is Zynex Medical, Inc. (ZMI). Its other subsidiaries include Zynex Monitoring Solutions, Inc. (ZMS) and Zynex Europe, ApS (ZEU). ZMI designs, manufactures and markets medical devices that treat chronic and acute pain, as well as activate and exercise muscles for rehabilitative purposes with electrical stimulation. ZMS is in the process of developing its blood volume monitoring product for non-invasive cardiac monitoring. ZEU intends to focus on sales and marketing its products within the international marketplace, upon receipt of necessary regulatory approvals. It markets and sells Zynex-manufactured products and distributes private labeled products. Its products include NexWave, NeuroMove, InWave, Electrodes and Batteries. ZMI devices are intended for pain management to reduce reliance on drugs and medications.

Arch Therapeutics Company Profile

Arch Therapeutics, Inc. is a development-stage company. The Company operates as a biotechnology company. The Company focuses on developing products to stop bleeding (hemostasis) and control leaking (sealant) during surgery and trauma care. The Company’s technology is based on a self-assembling peptide that creates a physical, mechanical barrier, which could be applied to seal organs or wounds that are leaking blood and other fluids. The Company’s primary product candidates, collectively known as the AC5 Devices (AC5), are designed to achieve hemostasis in surgical procedures. The Company’s product candidates rely on its self-assembling peptide technology and are designed to achieve hemostasis in skin wounds, and minimally invasive and open surgical procedures. The Company focuses on developing other product candidates based on its technology platform for use in a range of indications. As of September 30, 2016, the Company had not generated any revenues.

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