Globus Medical (NYSE: GMED) and Arch Therapeutics (NASDAQ:ARTH) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Profitability

This table compares Globus Medical and Arch Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Globus Medical 18.12% 13.99% 12.63%
Arch Therapeutics N/A -178.83% -102.46%

Institutional & Insider Ownership

65.8% of Globus Medical shares are owned by institutional investors. 28.2% of Globus Medical shares are owned by 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Globus Medical and Arch Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Globus Medical 1 5 5 0 2.36
Arch Therapeutics 0 0 4 0 3.00

Globus Medical presently has a consensus price target of $30.57, suggesting a potential upside of 1.40%. Arch Therapeutics has a consensus price target of $2.83, suggesting a potential upside of 255.71%. Given Arch Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Arch Therapeutics is more favorable than Globus Medical.

Valuation & Earnings

This table compares Globus Medical and Arch Therapeutics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Globus Medical $595.44 million 3.66 $207.13 million $1.11 27.16
Arch Therapeutics N/A N/A N/A N/A N/A

Globus Medical has higher revenue and earnings than Arch Therapeutics.

Summary

Globus Medical beats Arch Therapeutics on 7 of the 9 factors compared between the two stocks.

Globus Medical Company Profile

Globus Medical, Inc. (Globus) is a medical device company focused on the design, development and commercialization of musculoskeletal implants that promote healing in patients with spine disorders. The Company is focused on implants that promote healing in patients with spine disorders. The Company’s products fall into one of two categories: Innovative Fusion or Disruptive Technologies. The Company sells its products through exclusive sales force in the United States, as well as within North, Central & South America, Europe, Asia, Africa and Australia. The sales force consists of direct sales representatives and distributor sales representatives employed by exclusive independent distributors.

Arch Therapeutics Company Profile

Arch Therapeutics, Inc. is a development-stage company. The Company operates as a biotechnology company. The Company focuses on developing products to stop bleeding (hemostasis) and control leaking (sealant) during surgery and trauma care. The Company’s technology is based on a self-assembling peptide that creates a physical, mechanical barrier, which could be applied to seal organs or wounds that are leaking blood and other fluids. The Company’s primary product candidates, collectively known as the AC5 Devices (AC5), are designed to achieve hemostasis in surgical procedures. The Company’s product candidates rely on its self-assembling peptide technology and are designed to achieve hemostasis in skin wounds, and minimally invasive and open surgical procedures. The Company focuses on developing other product candidates based on its technology platform for use in a range of indications. As of September 30, 2016, the Company had not generated any revenues.

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