Critical Review: Arcutis Biotherapeutics (NASDAQ:ARQT) and Zevra Therapeutics (NASDAQ:ZVRA)

Arcutis Biotherapeutics (NASDAQ:ARQT) and Zevra Therapeutics (NASDAQ:ZVRA) are both healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Risk and Volatility

Arcutis Biotherapeutics has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500. Comparatively, Zevra Therapeutics has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Arcutis Biotherapeutics and Zevra Therapeutics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcutis Biotherapeutics	0	2	8	0	2.80
Zevra Therapeutics	0	1	9	1	3.00

Arcutis Biotherapeutics currently has a consensus price target of $39.75, indicating a potential upside of 42.44%. Zevra Therapeutics has a consensus price target of $27.14, indicating a potential upside of 186.77%. Given Zevra Therapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Zevra Therapeutics is more favorable than Arcutis Biotherapeutics.

Profitability

This table compares Arcutis Biotherapeutics and Zevra Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcutis Biotherapeutics	5.88%	14.18%	6.28%
Zevra Therapeutics	52.80%	54.64%	37.84%

Institutional and Insider Ownership

35.0% of Zevra Therapeutics shares are held by institutional investors. 9.4% of Arcutis Biotherapeutics shares are held by company insiders. Comparatively, 3.7% of Zevra Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Arcutis Biotherapeutics and Zevra Therapeutics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcutis Biotherapeutics	$376.07 million	9.38	-$16.14 million	$0.21	132.89
Zevra Therapeutics	$106.47 million	5.29	$83.23 million	$1.19	7.95

Zevra Therapeutics has lower revenue, but higher earnings than Arcutis Biotherapeutics. Zevra Therapeutics is trading at a lower price-to-earnings ratio than Arcutis Biotherapeutics, indicating that it is currently the more affordable of the two stocks.

Summary

Zevra Therapeutics beats Arcutis Biotherapeutics on 10 of the 15 factors compared between the two stocks.

About Arcutis Biotherapeutics

Arcutis Biotherapeutics is a biopharmaceutical company focused on developing and commercializing treatments for inflammatory skin diseases. Founded in 2016, the company is headquartered in Westlake Village, California. Arcutis primarily serves the U.S. market and continues to develop medicines for dermatologic conditions. Its leadership is headed by President and Chief Executive Officer Frank Watanabe.

About Zevra Therapeutics

Zevra Therapeutics, Inc. is a U.S.-based biopharmaceutical company focused on developing and commercializing treatments for rare diseases. Its work includes research and development as well as bringing therapies to patients with limited treatment options. The company’s products include MIPLYFFA (arimoclomol), approved in the United States for neurological manifestations of Niemann-Pick disease type C, and OLPRUVA (sodium phenylbutyrate), a treatment for certain urea cycle disorders. Zevra also advances investigational therapies for rare and complex conditions.