Analyzing Arrowhead Pharmaceuticals (ARWR) and Viking Therapeutics (VKTX)

Arrowhead Pharmaceuticals (NASDAQ: ARWR) and Viking Therapeutics (NASDAQ:VKTX) are both small-cap healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Risk and Volatility

Arrowhead Pharmaceuticals has a beta of 1.79, suggesting that its stock price is 79% more volatile than the S&P 500. Comparatively, Viking Therapeutics has a beta of 1.88, suggesting that its stock price is 88% more volatile than the S&P 500.

Institutional & Insider Ownership

20.1% of Arrowhead Pharmaceuticals shares are owned by institutional investors. Comparatively, 5.8% of Viking Therapeutics shares are owned by institutional investors. 4.6% of Arrowhead Pharmaceuticals shares are owned by insiders. Comparatively, 19.6% of Viking Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Arrowhead Pharmaceuticals and Viking Therapeutics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arrowhead Pharmaceuticals $31.41 million 14.99 -$34.38 million ($0.47) -13.38
Viking Therapeutics N/A N/A -$14.73 million ($0.84) -5.54

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

Profitability

This table compares Arrowhead Pharmaceuticals and Viking Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arrowhead Pharmaceuticals -109.46% -38.10% -28.05%
Viking Therapeutics N/A -330.42% -144.29%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Arrowhead Pharmaceuticals and Viking Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arrowhead Pharmaceuticals 0 4 2 0 2.33
Viking Therapeutics 0 0 3 0 3.00

Arrowhead Pharmaceuticals currently has a consensus price target of $3.13, suggesting a potential downside of 50.32%. Viking Therapeutics has a consensus price target of $7.00, suggesting a potential upside of 50.54%. Given Viking Therapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Viking Therapeutics is more favorable than Arrowhead Pharmaceuticals.

Summary

Viking Therapeutics beats Arrowhead Pharmaceuticals on 8 of the 13 factors compared between the two stocks.

Arrowhead Pharmaceuticals Company Profile

Arrowhead Pharmaceuticals, Inc., formerly Arrowhead Research Corporation, develops medicines that treat intractable diseases by silencing the genes that cause them. Using a portfolio of ribonucleic acid (RNA) chemistries and modes of delivery, the Company’s therapies trigger the RNA interference mechanism to induce knockdown of target genes. The Company is focused on developing drugs for diseases with a genetic basis, characterized by the overproduction of one or more proteins. The Company’s preclinical pipeline of RNA interference (RNAi) therapeutics includes both subcutaneously administered liver-targeted candidates and extra-hepatic candidates. The Company’s pre-clinical-stage drug candidates include ARO-HBV, ARO-AAT, ARO-LPA, ARO-AMG1, ARO-F12 and ARO-HIF2. ARO-HBV is an RNAi therapeutic candidate for the treatment of chronic hepatitis B infection. ARO-AAT is a therapeutic candidate for the treatment of liver disease associated with Alpha-1 Antitrypsin Deficiency.

Viking Therapeutics Company Profile

Viking Therapeutics, Inc. is a clinical-stage biopharmaceutical company. The Company focuses on the development of therapies for metabolic and endocrine disorders. The Company’s clinical program, VK5211, is an orally available drug candidate, which is in Phase II clinical trial for acute rehabilitation following non-elective hip fracture surgery. VK5211 is a non-steroidal selective androgen receptor modulator (SARM). Its second program is focused on the development of orally available small molecule thyroid hormone receptor beta agonists. Its two molecules are VK2809 and VK0214. VK2809 is an orally available, tissue and receptor-subtype selective agonist of the thyroid beta receptor that is entering Phase II development for the treatment of patients with hypercholesterolemia and fatty liver disease. It is developing VK0214 for the treatment of X-linked adrenoleukodystrophy (X-ALD). It has a pipeline with approximately three additional programs targeting metabolic diseases and anemia.

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