Arena Pharmaceuticals (NASDAQ: ARNA) is one of 197 publicly-traded companies in the “Biotechnology & Medical Research” industry, but how does it contrast to its rivals? We will compare Arena Pharmaceuticals to similar companies based on the strength of its profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Profitability

This table compares Arena Pharmaceuticals and its rivals’ 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 -3,961.56% -120.07% -44.67%

Valuation & Earnings

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

Gross Revenue EBITDA Price/Earnings Ratio
Arena Pharmaceuticals $117.73 million $16.71 million -44.47
Arena Pharmaceuticals Competitors $207.78 million -$2.31 million 0.45

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Arena Pharmaceuticals and its rivals, as provided 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 469 2236 6133 118 2.66

Arena Pharmaceuticals currently has a consensus target price of $38.83, suggesting a potential upside of 53.19%. As a group, “Biotechnology & Medical Research” companies have a potential upside of 0.80%. Given Arena Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts clearly believe Arena Pharmaceuticals is more favorable than its rivals.

Risk & Volatility

Arena Pharmaceuticals has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Arena Pharmaceuticals’ rivals have a beta of 1.63, meaning that their average stock price is 63% more volatile than the S&P 500.

Institutional & Insider Ownership

46.2% of Arena Pharmaceuticals shares are owned by institutional investors. Comparatively, 46.6% of shares of all “Biotechnology & Medical Research” companies are owned by institutional investors. 1.9% of Arena Pharmaceuticals shares are owned by insiders. Comparatively, 13.8% of shares of all “Biotechnology & Medical Research” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

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

About Arena Pharmaceuticals

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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