Arch Therapeutics (OTCMKTS: ARTH) and Valeritas (NASDAQ:VLRX) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.
Institutional and Insider Ownership
0.0% of Arch Therapeutics shares are owned by institutional investors. Comparatively, 5.0% of Valeritas shares are owned by institutional investors. 1.2% of Valeritas shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings and target prices for Arch Therapeutics and Valeritas, as provided by MarketBeat.com.
||Strong Buy Ratings
Arch Therapeutics currently has a consensus target price of $3.00, indicating a potential upside of 963.83%. Valeritas has a consensus target price of $11.00, indicating a potential upside of 334.78%. Given Arch Therapeutics’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Arch Therapeutics is more favorable than Valeritas.
This table compares Arch Therapeutics and Valeritas’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Risk and Volatility
Arch Therapeutics has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Valeritas has a beta of 4.26, suggesting that its stock price is 326% more volatile than the S&P 500.
Valuation & Earnings
This table compares Arch Therapeutics and Valeritas’ gross revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Arch Therapeutics has higher earnings, but lower revenue than Valeritas.
Arch Therapeutics beats Valeritas on 6 of the 11 factors compared between the two stocks.
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.
Valeritas Company Profile
Valeritas, Inc. is a United States-based company, which is engaged in developing and commercializing treatment solutions that contribute to clinical outcomes for patients. The Company’s portfolio includes V-Go disposable insulin delivery device, which is distributed through retail pharmacy. Its V-Go delivers insulin at a continuous preset basal rate and bolus dosing for adults with Type 2 diabetes requiring insulin. Its development portfolio also includes the h-Patch technology, the Mini-Ject pre-filled needle-free delivery system and the Micro-Trans microneedle transdermal delivery patch. Its h-Patch is a controlled delivery technology platform designed to deliver drugs into subcutaneous tissue. The Mini-Ject represents needle-free injection system, combining a range of fully disposable pre-filled options. Micro-Trans microneedle array patch technology enables drug delivery into the dermis without limitations of drug size, structure, charge or the patient’s skin characteristics.
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