Arch Therapeutics (OTCMKTS:ARTH) and ResMed (NYSE:RMD) are both medical companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arch Therapeutics 0 0 2 0 3.00
ResMed 2 4 4 0 2.20

Arch Therapeutics currently has a consensus target price of $1.63, suggesting a potential upside of 913.72%. ResMed has a consensus target price of $183.33, suggesting a potential downside of 4.56%. Given Arch Therapeutics’ stronger consensus rating and higher probable upside, research analysts plainly believe Arch Therapeutics is more favorable than ResMed.

Insider & Institutional Ownership

0.0% of Arch Therapeutics shares are held by institutional investors. Comparatively, 67.2% of ResMed shares are held by institutional investors. 12.2% of Arch Therapeutics shares are held by company insiders. Comparatively, 1.2% of ResMed shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Arch Therapeutics and ResMed’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arch Therapeutics N/A N/A -$4.55 million N/A N/A
ResMed $2.61 billion 10.66 $404.59 million $3.64 52.77

ResMed has higher revenue and earnings than Arch Therapeutics.

Profitability

This table compares Arch Therapeutics and ResMed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arch Therapeutics N/A N/A -137.14%
ResMed 17.73% 29.26% 14.87%

Risk & Volatility

Arch Therapeutics has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, ResMed has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Summary

ResMed beats Arch Therapeutics on 8 of the 11 factors compared between the two stocks.

About Arch Therapeutics

Arch Therapeutics, Inc., together with its subsidiaries, operates as a biotechnology company in the United States. The company develops products based on its technology to stop bleeding and control leaking, as well as manages wounds during surgery, trauma, and interventional care. Its primary product candidate is AC5 Devices, a product containing synthetic biocompatible peptides that comprise naturally occurring amino acids to achieve hemostasis in skin wounds and in minimally invasive and open surgical procedures. The company was founded in 2006 and is based in Framingham, Massachusetts.

About ResMed

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications that diagnose, treat, and manage respiratory disorders comprising sleep disordered breathing, chronic obstructive pulmonary disease, neuromuscular disease, and other chronic diseases. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, portable oxygen concentrators, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides humidifiers, carry bags, and breathing circuits; data communications and control products, such as AirView Diagnostics, EasyCare, ResLink, ResControl, ResControl II, TxControl, ResScan, and ResTraxx modules; U-Sleep, which enables automated patient coaching through a text, email, or interactive voice phone call; and myAir, a patient engagement application that provides sleep data and a daily score based on their previous night's data, as well as offers business management software and services to medical equipment and home health providers. It markets its products to sleep clinics, home healthcare dealers, patients, hospitals, physicians, and third-party payers through a network of distributors and direct sales force in approximately 120 countries. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.

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