Financial Comparison: Arch Therapeutics (OTCMKTS:ARTH) versus InspireMD (NYSE:NSPR)

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

Institutional & Insider Ownership

44.8% of InspireMD shares are held by institutional investors. Comparatively, 6.9% of Arch Therapeutics shares are held by institutional investors. 29.7% of InspireMD shares are held by insiders. Comparatively, 4.5% of Arch Therapeutics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for InspireMD and Arch Therapeutics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
InspireMD	0	0	2	0	3.00
Arch Therapeutics	0	0	0	0	0.00

InspireMD currently has a consensus target price of $4.75, indicating a potential upside of 82.69%. Given InspireMD’s stronger consensus rating and higher probable upside, analysts clearly believe InspireMD is more favorable than Arch Therapeutics.

Volatility & Risk

InspireMD has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 4.02, indicating that its share price is 302% more volatile than the S&P 500.

Valuation and Earnings

This table compares InspireMD and Arch Therapeutics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
InspireMD	$7.01 million	11.36	-$19.92 million	($0.78)	-3.33
Arch Therapeutics	$80,000.00	0.00	-$6.98 million	N/A	N/A

Arch Therapeutics has lower revenue, but higher earnings than InspireMD.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
InspireMD	-413.96%	-69.42%	-57.68%
Arch Therapeutics	-8,257.70%	N/A	-730.22%

Summary

InspireMD beats Arch Therapeutics on 8 of the 11 factors compared between the two stocks.

About InspireMD

InspireMD, Inc., a medical device company, focuses on the development and commercialization of MicroNet stent platform technology for the treatment of vascular and coronary diseases in Europe, Latin America, the Middle East, and Asia Pacific. The company offers CGuard carotid embolic prevention system (EPS) for use in carotid artery applications; CGuard Prime Stent System, a mesh-covered self-expanding carotid stent; and SwitchGuard NPS, a non-invasive transcarotid artery revascularization device; as well as treating acute stroke with tandem lesions. InspireMD, Inc. has a strategic agreement with Jacobs Institute to execute an early feasibility study of CGuard Prime for the treatment of acute stroke patients with tandem lesions. The company sells its products through local distribution partners. InspireMD, Inc. was founded in 2005 and is headquartered in Tel Aviv-Yafo, Israel.

About Arch Therapeutics

Arch Therapeutics, Inc., together with its subsidiaries, operates as a biotechnology company in the United States. It develops and markets products based on its AC5 self-assembling technology platform to stop bleeding and control leaking, as well as manages wounds during surgery, trauma, and interventional care or from disease. The company's flagship products include AC5 advanced wound system and AC5 topical hemostat, which are intended for skin applications, such as management of complicated chronic wounds or acute surgical wounds. It is also involved in the development of AC5-G for gastrointestinal endoscopic procedures, and AC5-V and AC5 surgical hemostat for hemostasis inside the body. The company was founded in 2006 and is based in Framingham, Massachusetts.