Zevra Therapeutics (NASDAQ:ZVRA) versus Arcutis Biotherapeutics (NASDAQ:ARQT) Critical Analysis

Arcutis Biotherapeutics (NASDAQ:ARQT) and Zevra Therapeutics (NASDAQ:ZVRA) are both healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

35.0% of Zevra Therapeutics shares are owned by institutional investors. 9.4% of Arcutis Biotherapeutics shares are owned by insiders. Comparatively, 3.7% of Zevra Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Arcutis Biotherapeutics and Zevra Therapeutics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcutis Biotherapeutics	0	2	8	0	2.80
Zevra Therapeutics	0	1	9	1	3.00

Arcutis Biotherapeutics currently has a consensus target price of $39.75, indicating a potential upside of 55.61%. Zevra Therapeutics has a consensus target price of $27.14, indicating a potential upside of 134.31%. Given Zevra Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Zevra Therapeutics is more favorable than Arcutis Biotherapeutics.

Earnings & Valuation

This table compares Arcutis Biotherapeutics and Zevra Therapeutics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcutis Biotherapeutics	$463.98 million	6.92	-$16.14 million	$0.21	121.64
Zevra Therapeutics	$147.76 million	4.66	$83.23 million	$1.19	9.73

Zevra Therapeutics has lower revenue, but higher earnings than Arcutis Biotherapeutics. Zevra Therapeutics is trading at a lower price-to-earnings ratio than Arcutis Biotherapeutics, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Arcutis Biotherapeutics has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500. Comparatively, Zevra Therapeutics has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Profitability

This table compares Arcutis Biotherapeutics and Zevra Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcutis Biotherapeutics	5.88%	14.96%	6.50%
Zevra Therapeutics	52.80%	54.64%	37.84%

Summary

Zevra Therapeutics beats Arcutis Biotherapeutics on 10 of the 15 factors compared between the two stocks.

About Arcutis Biotherapeutics

Arcutis Biotherapeutics, Inc., a biopharmaceutical company, focuses on developing and commercializing treatments for dermatological diseases. Its lead product candidate is ARQ-151, a topical roflumilast cream that has completed Phase III clinical trials for the treatment of plaque psoriasis and atopic dermatitis. The company is also developing ARQ-154, a topical ZORYVE for the treatment of scalp and body psoriasis and seborrheic dermatitis; ARQ-252, a selective topical janus kinase type 1 inhibitor for hand eczema and vitiligo; ARQ-255, a topical JAK1 inhibitor for alopecia areata; and ARQ-234, a CD200R fusion protein for the treatment of moderate-to-severe atopic dermatitis. The company was formerly known as Arcutis, Inc. and changed its name to Arcutis Biotherapeutics, Inc. in October 2019. Arcutis Biotherapeutics, Inc. was incorporated in 2016 and is headquartered in Westlake Village, California.

About Zevra Therapeutics

Zevra Therapeutics, Inc. discovers and develops various proprietary prodrugs to treat serious medical conditions in the United States. The company develops its products through Ligand Activated Therapy platform. Its lead product candidate is KP1077, consisting of KP1077IH, which is under Phase 2 clinical trial for the treatment of idiopathic hypersomnia, and KP1077N, which is under Phase ½ clinical trial to treat narcolepsy. The company is also developing Celiprolol, a prodrug product candidate that is under Phase 1/2 clinical trial for the treatment of vascular Ehlers Danlos syndrome. In addition, it offers AZSTARYS, a once-daily treatment for attention deficit hyperactivity disorder in patients aged six years and older; OLPRUVA to treat urea cycle disorders; and Arimoclomol for the treatment of niemann pick disease type C, an ultra-rare neurodegenerative lysosomal storage disorder. The company has collaboration and license agreement with Commave Therapeutics SA to develop, manufacture and commercialize the company’s product candidates containing SDX and d-methylphenidate; and license agreement with Acer and Relief Therapeutics, Inc. to develop and commercialize rights for OLPRUVA. The company was formerly known as KemPharm, Inc. and changed its name to Zevra Therapeutics, Inc. in February 2023. Zevra Therapeutics, Inc. was incorporated in 2006 and is headquartered in Celebration, Florida.