Arena Pharmaceuticals (NASDAQ: ARNA) is one of 196 public companies in the “Biotechnology & Medical Research” industry, but how does it compare to its rivals? We will compare Arena Pharmaceuticals to similar companies based on the strength of its analyst recommendations, earnings, institutional ownership, valuation, risk, dividends and profitability.

Institutional & Insider Ownership

46.2% of Arena Pharmaceuticals shares are held by institutional investors. Comparatively, 49.5% of shares of all “Biotechnology & Medical Research” companies are held by institutional investors. 1.9% of Arena Pharmaceuticals shares are held by insiders. Comparatively, 14.3% of shares of all “Biotechnology & Medical Research” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

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

Gross Revenue EBITDA Price/Earnings Ratio
Arena Pharmaceuticals $117.73 million $16.71 million -42.65
Arena Pharmaceuticals Competitors $207.14 million -$2.51 million 0.28

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.

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 -3,680.23% -415.63% -47.84%

Risk & Volatility

Arena Pharmaceuticals has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Arena Pharmaceuticals’ rivals have a beta of 1.67, suggesting that their average share price is 67% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Arena Pharmaceuticals and its rivals, as reported 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 786 2929 6395 144 2.58

Arena Pharmaceuticals currently has a consensus price target of $38.83, suggesting a potential upside of 59.74%. As a group, “Biotechnology & Medical Research” companies have a potential upside of 10.11%. Given Arena Pharmaceuticals’ stronger consensus rating and higher probable upside, research analysts plainly believe Arena Pharmaceuticals is more favorable than its rivals.

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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