Avid Bioservices (NASDAQ:CDMO – Get Free Report) and Arcutis Biotherapeutics (NASDAQ:ARQT – Get Free Report) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Insider & Institutional Ownership
97.2% of Avid Bioservices shares are owned by institutional investors. 3.1% of Avid Bioservices shares are owned by insiders. Comparatively, 9.5% of Arcutis Biotherapeutics shares are owned 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.
Earnings & Valuation
This table compares Avid Bioservices and Arcutis Biotherapeutics”s top-line revenue, earnings per share 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 | 9.59 | -$262.14 million | ($1.16) | -13.69 |
Volatility and Risk
Avid Bioservices has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, Arcutis Biotherapeutics has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations for Avid Bioservices and Arcutis Biotherapeutics, as provided by MarketBeat.com.
| 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 presently has a consensus price target of $12.25, suggesting a potential downside of 1.96%. Arcutis Biotherapeutics has a consensus price target of $18.80, suggesting a potential upside of 18.36%. Given Arcutis Biotherapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Arcutis Biotherapeutics is more favorable than Avid Bioservices.
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% |
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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