Corcept Therapeutics (NASDAQ:CORT) and Arena Pharmaceuticals (NASDAQ:ARNA) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Risk and Volatility

Corcept Therapeutics has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500. Comparatively, Arena Pharmaceuticals has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Profitability

This table compares Corcept Therapeutics and Arena Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Corcept Therapeutics 68.32% 38.53% 33.42%
Arena Pharmaceuticals -377.94% -25.90% -20.20%

Earnings and Valuation

This table compares Corcept Therapeutics and Arena Pharmaceuticals’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Corcept Therapeutics $159.20 million 10.42 $129.12 million $0.44 32.48
Arena Pharmaceuticals $21.34 million 98.89 -$91.40 million ($2.63) -16.26

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

Institutional & Insider Ownership

74.8% of Corcept Therapeutics shares are owned by institutional investors. Comparatively, 81.9% of Arena Pharmaceuticals shares are owned by institutional investors. 15.0% of Corcept Therapeutics shares are owned by company insiders. Comparatively, 1.9% of Arena Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Corcept Therapeutics and Arena Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Corcept Therapeutics 0 2 3 0 2.60
Arena Pharmaceuticals 0 0 8 0 3.00

Corcept Therapeutics presently has a consensus target price of $22.40, suggesting a potential upside of 56.75%. Arena Pharmaceuticals has a consensus target price of $60.38, suggesting a potential upside of 41.20%. Given Corcept Therapeutics’ higher probable upside, analysts plainly believe Corcept Therapeutics is more favorable than Arena Pharmaceuticals.

Summary

Corcept Therapeutics beats Arena Pharmaceuticals on 10 of the 14 factors compared between the two stocks.

About Corcept Therapeutics

Corcept Therapeutics Incorporated, a pharmaceutical company, discovers, develops, and commercializes drugs for the treatment of severe metabolic, oncologic, and psychiatric disorders in the United States. The company offers Korlym (mifepristone) tablets as a once-daily oral medication for the treatment of hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing's syndrome, who have type 2 diabetes mellitus or glucose intolerance, and have failed surgery or are not candidates for surgery, as well as develops CLIA-validated assay to measure FKBP5 gene expression. It is developing relacorilant that is in a Phase II trial to treat patients with Cushing's syndrome; abraxane in combination with relacorilant, which is in Phase I/II open label trial to treat solid tumors; and selective cortisol modulator CORT125281 combined with Xtandi that is in open label Phase I/II trial to treat patients with metastatic castration-resistant prostate cancer. The company is also developing CORT118335 selective cortisol modulator, which is in Phase I/II open label trial for the treatment of antipsychotic-induced weight gain and non-alcoholic steatotic hepatitis. Corcept Therapeutics Incorporated was founded in 1998 and is headquartered in Menlo Park, California.

About Arena Pharmaceuticals

Arena Pharmaceuticals, Inc., a biopharmaceutical company, focuses on developing novel small molecule drugs for various therapeutic areas in the United States and Switzerland. Its proprietary investigational clinical programs include ralinepag (APD811), which is in Phase III trial to treat pulmonary arterial hypertension; etrasimod that is in Phase II trials for treating immune and inflammatory conditions with primary focus on ulcerative colitis and hepatic conditions, as well as for primary biliary cholangitis and pyoderma gangrenosum; and APD371, which is in Phase II trial for the treatment of pain associated with Crohn's disease. The company has collaboration agreements with Everest Medicines Limited; Axovant Sciences GmbH; Boehringer Ingelheim International GmbH; Eisai Co., Ltd.; and Eisai Inc. Arena Pharmaceuticals, Inc. was founded in 1997 and is based in San Diego, California.

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