Analyzing Arch Therapeutics (OTCMKTS:ARTH) & Profound Medical (NASDAQ:PROF)

Arch Therapeutics (OTCMKTS:ARTH) and Profound Medical (NASDAQ:PROF) are both small-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Risk & Volatility

Arch Therapeutics has a beta of 4.02, suggesting that its stock price is 302% more volatile than the S&P 500. Comparatively, Profound Medical has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Insider & Institutional Ownership

6.9% of Arch Therapeutics shares are held by institutional investors. Comparatively, 47.9% of Profound Medical shares are held by institutional investors. 4.5% of Arch Therapeutics shares are held by insiders. Comparatively, 1.5% of Profound Medical shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Arch Therapeutics and Profound Medical, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arch Therapeutics	0	0	0	0	0.00
Profound Medical	0	0	2	0	3.00

Profound Medical has a consensus target price of $11.50, indicating a potential upside of 184.65%. Given Profound Medical’s stronger consensus rating and higher probable upside, analysts clearly believe Profound Medical is more favorable than Arch Therapeutics.

Valuation & Earnings

This table compares Arch Therapeutics and Profound Medical”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arch Therapeutics	$80,000.00	0.15	-$6.98 million	N/A	N/A
Profound Medical	$11.86 million	10.24	-$28.57 million	($1.22)	-3.31

Arch Therapeutics has higher earnings, but lower revenue than Profound Medical.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arch Therapeutics	-8,257.70%	N/A	-730.22%
Profound Medical	-349.41%	-85.22%	-64.87%

Summary

Profound Medical beats Arch Therapeutics on 8 of the 12 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. It develops and markets products based on its AC5 self-assembling technology platform to stop bleeding and control leaking, as well as manages wounds during surgery, trauma, and interventional care or from disease. The company's flagship products include AC5 advanced wound system and AC5 topical hemostat, which are intended for skin applications, such as management of complicated chronic wounds or acute surgical wounds. It is also involved in the development of AC5-G for gastrointestinal endoscopic procedures, and AC5-V and AC5 surgical hemostat for hemostasis inside the body. The company was founded in 2006 and is based in Framingham, Massachusetts.

About Profound Medical

Profound Medical Corp., together with its subsidiaries, operates as a commercial-stage medical device company that develops and markets incision-free therapeutic systems for the image guided ablation of diseased tissue in Canada, Germany, the United States, and Finland. Its lead product TULSA-PRO system combines magnetic resonance imaging(MRI), robotically-driven transurethral sweeping action/thermal ultrasound and closed-loop temperature feedback control to provide precise, flexible, and durable ablation of a surgeon defined region of prostate and protect the urethra and rectum. The company also offers Sonalleve, which combines real-time MRI and thermometry for the treatment of uterine fibroids, adenomyotic tissue, palliative pain treatment of bone metastases, osteoid osteoma, and management of benign tumors. Profound Medical Corp. is headquartered in Mississauga, Canada.