Arena Pharmaceuticals (NASDAQ: ARNA) is one of 196 public companies in the “Biotechnology & Medical Research” industry, but how does it contrast to its peers? We will compare Arena Pharmaceuticals to similar businesses based on the strength of its risk, profitability, earnings, valuation, dividends, institutional ownership and analyst recommendations.

Profitability

This table compares Arena Pharmaceuticals and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arena Pharmaceuticals -16.27% -49.87% -10.82%
Arena Pharmaceuticals Competitors -3,682.34% -415.70% -47.90%

Institutional & Insider Ownership

46.2% of Arena Pharmaceuticals shares are owned by institutional investors. Comparatively, 47.6% of shares of all “Biotechnology & Medical Research” companies are owned by institutional investors. 1.9% of Arena Pharmaceuticals shares are owned by insiders. Comparatively, 14.0% of shares of all “Biotechnology & Medical Research” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Arena Pharmaceuticals has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Arena Pharmaceuticals’ peers have a beta of 1.67, indicating that their average stock price is 67% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Arena Pharmaceuticals and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arena Pharmaceuticals 0 2 5 0 2.71
Arena Pharmaceuticals Competitors 778 2915 6364 144 2.58

Arena Pharmaceuticals presently has a consensus target price of $38.83, suggesting a potential upside of 61.33%. As a group, “Biotechnology & Medical Research” companies have a potential upside of 8.59%. Given Arena Pharmaceuticals’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Arena Pharmaceuticals is more favorable than its peers.

Valuation & Earnings

This table compares Arena Pharmaceuticals and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Arena Pharmaceuticals $117.73 million $16.71 million -42.23
Arena Pharmaceuticals Competitors $207.12 million -$2.38 million 0.38

Arena Pharmaceuticals’ peers have higher revenue, but lower earnings than Arena Pharmaceuticals. Arena Pharmaceuticals is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Arena Pharmaceuticals beats its peers on 7 of the 12 factors compared.

Arena Pharmaceuticals Company Profile

Arena Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on developing small molecule drugs across a range of therapeutic areas. The Company has three primary investigational clinical programs: etrasimod (APD334) in Phase II evaluation for ulcerative colitis, APD371 entering Phase II evaluation for the treatment of pain associated with Crohn’s disease, and ralinepag (APD811) in Phase II evaluation for pulmonary arterial hypertension (PAH). The Company’s drug, Lorcaserin, is approved for marketing in the United States and South Korea for the indication of weight management. The Company’s drug candidates in clinical development include APD334 for autoimmune diseases, ralinepag for vascular diseases and APD371 for pain. The Company’s programs under collaboration include nelotanserin for dementia-associated psychosis, temanogrel for thrombotic diseases, and an undisclosed orphan GPCR for central nervous system (CNS) indication(s).

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