Critical Comparison: Arch Therapeutics (OTCMKTS:ARTH) and Cryolife (CRY)

Cryolife (NYSE: CRY) and Arch Therapeutics (OTCMKTS:ARTH) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Institutional and Insider Ownership

67.6% of Cryolife shares are held by institutional investors. Comparatively, 0.0% of Arch Therapeutics shares are held by institutional investors. 4.0% of Cryolife shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cryolife $189.70 million 5.44 $3.70 million $0.40 70.38
Arch Therapeutics N/A N/A -$7.78 million N/A N/A

Cryolife has higher revenue and earnings than Arch Therapeutics.

Risk and Volatility

Cryolife has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Cryolife -1.15% 4.55% 2.50%
Arch Therapeutics N/A -211.35% -108.96%

Analyst Ratings

This is a summary of current ratings and price targets for Cryolife and Arch Therapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cryolife 0 0 3 0 3.00
Arch Therapeutics 0 0 3 0 3.00

Cryolife currently has a consensus target price of $25.83, suggesting a potential downside of 8.23%. Arch Therapeutics has a consensus target price of $3.00, suggesting a potential upside of 531.58%. Given Arch Therapeutics’ higher probable upside, analysts clearly believe Arch Therapeutics is more favorable than Cryolife.

Summary

Cryolife beats Arch Therapeutics on 6 of the 9 factors compared between the two stocks.

Cryolife Company Profile

CryoLife, Inc., together with its subsidiaries, manufactures, processes, and distributes medical devices and implantable human tissues for use in cardiac and vascular surgeries worldwide. The company operates in two segments, Medical Devices and Preservation Services. It offers BioGlue, an agent for cross-linking proteins for cardiac, vascular, pulmonary, and general surgical applications; On-X mechanical heart valves for aortic and mitral indications; cardiac preservation services; PhotoFix, a bovine pericardial patch for use in cardiac and vascular repairing activities; and PerClot, an absorbable powdered hemostat for use in surgical procedures, including cardiac, vascular, orthopedic, neurological, gynecological, ENT, and trauma surgeries. The company also provides cardiac laser therapy products, which include laser consoles, related service and maintenance, and single-use, as well as fiber-optic hand-pieces for the treatment of coronary artery disease in patients with severe angina. In addition, it distributes E-vita OPEN PLUS, a hybrid stent graft systems for the surgical and endovascular treatment; E-xtra DESIGN ENGINEERING products for the treatment of aortic vascular diseases; E-ventus BX, a balloon-expandable peripheral stent graft for the endovascular treatment of renal and pelvic arteries; E-liac, a stent graft used to treat aneurysmal iliac arteries, as well as aneurysmal iliac side branches; E-vita THORACIC 3G is a stent graft system for the endovascular treatment of thoracic aortic aneurysms; and E-tegra, an abdominal aortic aneurysms stent graft system for the endovascular treatment. Further, the company offers vascular preservation services; and synthetic vascular grafts for use in open aortic and peripheral vascular surgical procedures. The company serves physicians, hospitals, and other healthcare industries, as well as cardiac, vascular, thoracic, and general surgeons. CryoLife, Inc. was founded in 1984 and is headquartered in Kennesaw, Georgia.

Arch Therapeutics Company Profile

Arch Therapeutics, Inc., 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 provides other advantages during surgery, trauma, and interventional care. Its primary product candidate is AC5 Devices, a synthetic biocompatible peptides that comprises naturally occurring amino acids to achieve hemostasis in minimally invasive and open surgical procedures. The company was founded in 2006 and is based in Framingham, Massachusetts.

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