AxoGen (NASDAQ: AXGN) and Arch Therapeutics (OTCMKTS:ARTH) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.
Volatility and Risk
AxoGen has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 4.53, suggesting that its stock price is 353% more volatile than the S&P 500.
This table compares AxoGen and Arch Therapeutics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
66.0% of AxoGen shares are held by institutional investors. Comparatively, 0.0% of Arch Therapeutics shares are held by institutional investors. 9.3% of AxoGen shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares AxoGen and Arch Therapeutics’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|AxoGen||$41.11 million||22.80||-$14.41 million||($0.40)||-68.75|
|Arch Therapeutics||N/A||N/A||-$7.78 million||($0.05)||-9.60|
Arch Therapeutics has lower revenue, but higher earnings than AxoGen. AxoGen is trading at a lower price-to-earnings ratio than Arch Therapeutics, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for AxoGen and Arch Therapeutics, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AxoGen presently has a consensus price target of $26.17, suggesting a potential downside of 4.85%. Arch Therapeutics has a consensus price target of $2.83, suggesting a potential upside of 490.28%. Given Arch Therapeutics’ higher probable upside, analysts plainly believe Arch Therapeutics is more favorable than AxoGen.
AxoGen beats Arch Therapeutics on 6 of the 11 factors compared between the two stocks.
AxoGen Company Profile
AxoGen, Inc. provides surgical solutions for peripheral nerve injuries. The companys surgical nerve repair solutions include Avance Nerve Graft, an off-the-shelf processed human nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site; AxoGuard Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves; and AxoGuard Nerve Protector, a porcine submucosa ECM product that is used to wrap and protect injured peripheral nerves, as well as reinforces the nerve reconstruction while preventing soft tissue attachments. Its solutions also comprise Avive Soft Tissue Membrane, a minimally processed human umbilical cord membrane that is used as a resorbable soft tissue covering to separate tissues and modulate inflammation in the surgical bed. In addition, the company offers AcroVal neurosensory and motor testing system, which consists of AcroGrip for use in hand grip strength measurement; AcroPinch for measuring pinch strength; and Pressure-Specified Sensory Device, a somatosensory evaluation and measurement device. Further, it provides AxoTouch two point discriminator, a tool that is used for measuring the innervation density of surface area of the skin. The company provides its products to hospitals, surgery centers, and military hospitals in the United States, Canada, the United Kingdom and other European countries, and internationally. AxoGen, Inc. is headquartered in Alachua, Florida.
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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