Critical Review: CannaPharmaRX (OTCMKTS:CPMD) & Arcutis Biotherapeutics (NASDAQ:ARQT)

Arcutis Biotherapeutics (NASDAQ:ARQT) and CannaPharmaRX (OTCMKTS:CPMD) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Risk and Volatility

Arcutis Biotherapeutics has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, CannaPharmaRX has a beta of 2.36, suggesting that its share price is 136% more volatile than the S&P 500.

Profitability

This table compares Arcutis Biotherapeutics and CannaPharmaRX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcutis Biotherapeutics	-204.35%	-197.28%	-60.67%
CannaPharmaRX	N/A	N/A	-40.68%

Earnings & Valuation

This table compares Arcutis Biotherapeutics and CannaPharmaRX’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcutis Biotherapeutics	$59.61 million	18.64	-$262.14 million	($2.93)	-3.28
CannaPharmaRX	N/A	N/A	$3.69 million	($0.01)	-1.10

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Arcutis Biotherapeutics and CannaPharmaRX, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcutis Biotherapeutics	0	2	6	0	2.75
CannaPharmaRX	0	0	0	0	N/A

Arcutis Biotherapeutics currently has a consensus price target of $25.38, suggesting a potential upside of 164.32%. Given Arcutis Biotherapeutics’ higher probable upside, equities research analysts clearly believe Arcutis Biotherapeutics is more favorable than CannaPharmaRX.

Summary

CannaPharmaRX beats Arcutis Biotherapeutics on 7 of the 10 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 CannaPharmaRX

CannaPharmaRX, Inc. operates in the cannabis industry in Canada. It evaluates, negotiates, acquires, and develops various cannabis cultivation projects. The company was incorporated in 1998 and is based in Calgary, Canada.