Financial Analysis: Kala Pharmaceuticals (KALA) and Arcturus Therapeutics (ARCT)

Kala Pharmaceuticals (NASDAQ:KALA) and Arcturus Therapeutics (NASDAQ:ARCT) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Valuation and Earnings

This table compares Kala Pharmaceuticals and Arcturus Therapeutics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kala Pharmaceuticals $40,000.00 5,323.50 -$42.21 million ($5.84) -1.08
Arcturus Therapeutics $13.00 million 5.06 -$10.90 million ($3.53) -1.73

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

Profitability

This table compares Kala Pharmaceuticals and Arcturus Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kala Pharmaceuticals N/A -72.11% -52.71%
Arcturus Therapeutics N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent recommendations for Kala Pharmaceuticals and Arcturus Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kala Pharmaceuticals 0 0 4 0 3.00
Arcturus Therapeutics 0 0 3 1 3.25

Kala Pharmaceuticals presently has a consensus target price of $25.75, suggesting a potential upside of 308.73%. Arcturus Therapeutics has a consensus target price of $12.00, suggesting a potential upside of 96.08%. Given Kala Pharmaceuticals’ higher possible upside, equities research analysts plainly believe Kala Pharmaceuticals is more favorable than Arcturus Therapeutics.

Insider & Institutional Ownership

47.6% of Kala Pharmaceuticals shares are held by institutional investors. Comparatively, 10.1% of Arcturus Therapeutics shares are held by institutional investors. 35.6% of Kala Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Kala Pharmaceuticals has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Arcturus Therapeutics has a beta of 1.79, meaning that its share price is 79% more volatile than the S&P 500.

Summary

Arcturus Therapeutics beats Kala Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

Kala Pharmaceuticals Company Profile

Kala Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapies using its proprietary nanoparticle-based Mucus Penetrating Particles (MPP) technology for the treatment of eye diseases. Its product candidates include KPI-121 1.0%, which has completed Phase III clinical trials for the treatment of inflammation and pain following ocular surgery; INVELTYS that has completed Phase III clinical trials for the temporary relief of the signs and symptoms of dry eye disease; and KPI-285, a MPP receptor tyrosine kinase inhibitor program, which is in preclinical studies for the treatment of retinal diseases. The company was formerly known as Hanes Newco, Inc. and changed its name to Kala Pharmaceuticals, Inc. in December 2009. Kala Pharmaceuticals, Inc. was founded in 2009 and is headquartered in Waltham, Massachusetts.

Arcturus Therapeutics Company Profile

Arcturus Therapeutics Ltd., an RNA medicines company, develops nucleic acid medicines to treat diseases with unmet medical needs. Its RNA therapeutics platforms could be applied in various types of RNA medicines, including small interfering RNA, messenger RNA, replicon RNA, antisense RNA, microRNA, and gene editing therapeutics. The company owns LUNAR lipid-mediated delivery and Unlocked Nucleomonomer Agent (UNA) technology, including UNA Oligomers, which are covered by its patent portfolio, including 120 patents and patent applications issued in the United States, Europe, Japan, China, and internationally. Its proprietary UNA technology is used to target individual genes in the human genome, as well as viral genes, and other species for therapeutic purposes. The company develops novel RNA therapeutics through its partnerships with Janssen Pharmaceuticals, Inc., Ultragenyx Pharmaceutical, Inc., Takeda Pharmaceutical Company Limited, Synthetic Genomics Inc., CureVac AG, and Cystic Fibrosis Foundation Therapeutics Inc. Arcturus Therapeutics Ltd. has a strategic collaboration with CureVac AG to jointly discover, develop, and commercialize novel messenger RNA therapeutics. The company was founded in 2013 and is headquartered in San Diego, California.

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