Analyzing ProPhase Labs (NASDAQ:PRPH) and Arcutis Biotherapeutics (NASDAQ:ARQT)

ProPhase Labs (NASDAQ:PRPH) and Arcutis Biotherapeutics (NASDAQ:ARQT) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Earnings and Valuation

This table compares ProPhase Labs and Arcutis Biotherapeutics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ProPhase Labs	$44.38 million	0.32	-$16.78 million	($1.21)	-0.62
Arcutis Biotherapeutics	$59.61 million	19.50	-$262.14 million	($1.79)	-5.55

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

Profitability

This table compares ProPhase Labs and Arcutis Biotherapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ProPhase Labs	-146.39%	-54.04%	-28.65%
Arcutis Biotherapeutics	-140.97%	-119.11%	-45.95%

Volatility & Risk

ProPhase Labs has a beta of -0.1, indicating that its share price is 110% less volatile than the S&P 500. Comparatively, Arcutis Biotherapeutics has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for ProPhase Labs and Arcutis Biotherapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ProPhase Labs	0	0	1	0	3.00
Arcutis Biotherapeutics	0	1	3	0	2.75

ProPhase Labs currently has a consensus target price of $11.00, suggesting a potential upside of 1,363.93%. Arcutis Biotherapeutics has a consensus target price of $15.50, suggesting a potential upside of 56.09%. Given ProPhase Labs’ stronger consensus rating and higher probable upside, research analysts plainly believe ProPhase Labs is more favorable than Arcutis Biotherapeutics.

Insider and Institutional Ownership

9.5% of ProPhase Labs shares are owned by institutional investors. 20.7% of ProPhase Labs shares are owned by insiders. Comparatively, 9.5% of Arcutis Biotherapeutics shares are owned by 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.

Summary

ProPhase Labs beats Arcutis Biotherapeutics on 9 of the 14 factors compared between the two stocks.

About ProPhase Labs

ProPhase Labs, Inc. develops and commercializes novel drugs, dietary supplements, and compounds in the United States. It operates through two segments: Diagnostic Services and Consumer Products. The company provides a range of TK supplements, including Legendz XL for male sexual health; and Triple Edge XL, an energy and stamina booster. It offers contract manufacturing services, such as product development, pre-commercialization, production, warehousing, and distribution; COVID-19 diagnostic information services to a range of customers, including health plans, third party payers, and government organizations; and respiratory pathogen panel molecular testing services, as well as personal genomics products and services. In addition, the company involved in the research, development, manufacture, distribution, marketing, and sale of over the counter (OTC) consumer healthcare products and dietary supplements; and retail operations. The company was formerly known as The Quigley Corporation. ProPhase Labs, Inc. was founded in 1989 and is headquartered in Garden City, New York.

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.