Financial Review: Arcutis Biotherapeutics (NASDAQ:ARQT) and Iterum Therapeutics (NASDAQ:ITRM)
by Kim Johansen · The Markets DailyIterum Therapeutics (NASDAQ:ITRM – Get Free Report) and Arcutis Biotherapeutics (NASDAQ:ARQT – Get Free Report) are both healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.
Profitability
This table compares Iterum Therapeutics and Arcutis Biotherapeutics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Iterum Therapeutics | N/A | N/A | -65.54% |
| Arcutis Biotherapeutics | 6.15% | 15.05% | 6.51% |
Institutional & Insider Ownership
9.2% of Iterum Therapeutics shares are owned by institutional investors. 2.0% of Iterum Therapeutics shares are owned by insiders. Comparatively, 9.4% of Arcutis Biotherapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Volatility & Risk
Iterum Therapeutics has a beta of 2.96, indicating that its stock price is 196% more volatile than the S&P 500. Comparatively, Arcutis Biotherapeutics has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings for Iterum Therapeutics and Arcutis Biotherapeutics, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Iterum Therapeutics | 1 | 2 | 0 | 0 | 1.67 |
| Arcutis Biotherapeutics | 0 | 3 | 6 | 0 | 2.67 |
Arcutis Biotherapeutics has a consensus target price of $35.57, suggesting a potential upside of 41.44%. Given Arcutis Biotherapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Arcutis Biotherapeutics is more favorable than Iterum Therapeutics.
Earnings & Valuation
This table compares Iterum Therapeutics and Arcutis Biotherapeutics”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Iterum Therapeutics | $390,000.00 | 4.10 | -$24.77 million | ($0.75) | -0.04 |
| Arcutis Biotherapeutics | $463.98 million | 6.81 | -$16.14 million | $0.21 | 119.76 |
Arcutis Biotherapeutics has higher revenue and earnings than Iterum Therapeutics. Iterum 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
Arcutis Biotherapeutics beats Iterum Therapeutics on 12 of the 14 factors compared between the two stocks.
About Iterum Therapeutics
Iterum Therapeutics plc, a clinical-stage pharmaceutical company, engages in developing and commercializing anti-infectives in Ireland, Bermuda, and the United States. It is developing sulopenem, a novel anti-infective compound with oral and intravenous formulations that is in Phase III clinical trials for the treatment of uncomplicated urinary tract infections, complicated urinary tract infections, and complicated intra-abdominal infections. The company was incorporated in 2015 and is headquartered in Dublin, Ireland.
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.