Financial Analysis: CNS Pharmaceuticals (NASDAQ:CNSP) vs. Arcutis Biotherapeutics (NASDAQ:ARQT)

CNS Pharmaceuticals (NASDAQ:CNSP) and Arcutis Biotherapeutics (NASDAQ:ARQT) 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, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Profitability

This table compares CNS Pharmaceuticals and Arcutis Biotherapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNS Pharmaceuticals	N/A	-603.40%	-421.35%
Arcutis Biotherapeutics	-439.79%	-294.85%	-78.57%

Analyst Ratings

This is a summary of recent ratings and recommmendations for CNS Pharmaceuticals and Arcutis Biotherapeutics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNS Pharmaceuticals	0	0	0	0	N/A
Arcutis Biotherapeutics	0	2	6	0	2.75

Arcutis Biotherapeutics has a consensus price target of $26.56, indicating a potential upside of 191.82%. Given Arcutis Biotherapeutics’ higher possible upside, analysts plainly believe Arcutis Biotherapeutics is more favorable than CNS Pharmaceuticals.

Earnings & Valuation

This table compares CNS Pharmaceuticals and Arcutis Biotherapeutics’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNS Pharmaceuticals	N/A	N/A	-$18.85 million	($5.66)	-0.04
Arcutis Biotherapeutics	$59.61 million	14.78	-$262.14 million	($3.92)	-2.32

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

Insider & Institutional Ownership

14.0% of CNS Pharmaceuticals shares are held by institutional investors. 3.9% of CNS Pharmaceuticals shares are held by company insiders. Comparatively, 20.7% of Arcutis Biotherapeutics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

CNS Pharmaceuticals has a beta of 2.67, indicating that its stock price is 167% more volatile than the S&P 500. Comparatively, Arcutis Biotherapeutics has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Summary

Arcutis Biotherapeutics beats CNS Pharmaceuticals on 7 of the 12 factors compared between the two stocks.

About CNS Pharmaceuticals

CNS Pharmaceuticals, Inc., a clinical pharmaceutical company, engages in the development of anti-cancer drug candidates for the treatment of brain and central nervous system tumors. The company's lead drug candidate is Berubicin, which completed Phase I clinical trial that is used for the treatment of glioblastoma multiforme. It has license agreements with Houston Pharmaceuticals, Inc., Reata Pharmaceuticals, Inc., Pomeranian Medical University, and The University of Texas M.D. Anderson Cancer Center; and a development agreement with WPD Pharmaceuticals Inc. The company was incorporated in 2017 and is based in Houston, Texas.

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.