Avid Bioservices (NASDAQ:CDMO – Get Free Report) and Arcutis Biotherapeutics (NASDAQ:ARQT – Get Free Report) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.
Profitability
This table compares Avid Bioservices and Arcutis Biotherapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Avid Bioservices | -101.07% | -33.18% | -8.45% |
| Arcutis Biotherapeutics | -140.97% | -119.11% | -45.95% |
Institutional and Insider Ownership
97.2% of Avid Bioservices shares are owned by institutional investors. 3.1% of Avid Bioservices shares are owned by company insiders. Comparatively, 9.5% of Arcutis Biotherapeutics 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.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Avid Bioservices | 0 | 4 | 0 | 0 | 2.00 |
| Arcutis Biotherapeutics | 0 | 1 | 5 | 0 | 2.83 |
Avid Bioservices currently has a consensus target price of $12.25, indicating a potential downside of 1.96%. Arcutis Biotherapeutics has a consensus target price of $18.80, indicating a potential upside of 10.52%. Given Arcutis Biotherapeutics’ stronger consensus rating and higher probable upside, analysts plainly believe Arcutis Biotherapeutics is more favorable than Avid Bioservices.
Volatility and Risk
Avid Bioservices has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Arcutis Biotherapeutics has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.
Valuation and Earnings
This table compares Avid Bioservices and Arcutis Biotherapeutics”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Avid Bioservices | $139.91 million | 5.71 | -$140.75 million | ($2.39) | -5.23 |
| Arcutis Biotherapeutics | $196.54 million | 10.27 | -$262.14 million | ($1.16) | -14.66 |
Avid Bioservices has higher earnings, but lower revenue than Arcutis Biotherapeutics. Arcutis Biotherapeutics is trading at a lower price-to-earnings ratio than Avid Bioservices, indicating that it is currently the more affordable of the two stocks.
Summary
Arcutis Biotherapeutics beats Avid Bioservices on 8 of the 14 factors compared between the two stocks.
About Avid Bioservices
Avid Bioservices, Inc. operates as a contract development and manufacturing organization for the biotechnology and biopharmaceutical industries in the United States. It provides process development and current good manufacturing practice clinical and commercial manufacturing services of biologics, including clinical and commercial drug substance manufacturing, bulk packaging, release and stability testing, regulatory submission and support, upstream and downstream development and optimization, analytical methods development, cell line development, testing, and characterization services. The company was formerly known as Peregrine Pharmaceuticals, Inc. and changed its name to Avid Bioservices, Inc. in January 2018. Avid Bioservices, Inc. was incorporated in 1981 and is based in Tustin, California.
About Arcutis Biotherapeutics
Arcutis Biotherapeutics, Inc., a biopharmaceutical company, focuses on developing and commercializing treatments for dermatological diseases. Its lead product candidate is ARQ-151, a topical roflumilast cream that has completed Phase III clinical trials for the treatment of plaque psoriasis and atopic dermatitis. The company is also developing ARQ-154, a topical ZORYVE for the treatment of scalp and body psoriasis and seborrheic dermatitis; ARQ-252, a selective topical janus kinase type 1 inhibitor for hand eczema and vitiligo; ARQ-255, a topical JAK1 inhibitor for alopecia areata; and ARQ-234, a CD200R fusion protein for the treatment of moderate-to-severe atopic dermatitis. The company was formerly known as Arcutis, Inc. and changed its name to Arcutis Biotherapeutics, Inc. in October 2019. Arcutis Biotherapeutics, Inc. was incorporated in 2016 and is headquartered in Westlake Village, California.
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