Kiniksa Pharmaceuticals (NASDAQ:KNSA) and Arena Pharmaceuticals (NASDAQ:ARNA) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.
Insider & Institutional Ownership
42.0% of Kiniksa Pharmaceuticals shares are held by institutional investors. Comparatively, 89.7% of Arena Pharmaceuticals shares are held by institutional investors. 70.6% of Kiniksa Pharmaceuticals shares are held by insiders. Comparatively, 3.1% of Arena Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Kiniksa Pharmaceuticals and Arena Pharmaceuticals' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Kiniksa Pharmaceuticals | N/A | -53.65% | -49.11% |
| Arena Pharmaceuticals | N/A | -33.17% | -30.41% |
Risk and Volatility
Kiniksa Pharmaceuticals has a beta of 0.03, indicating that its stock price is 97% less volatile than the S&P 500. Comparatively, Arena Pharmaceuticals has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Kiniksa Pharmaceuticals and Arena Pharmaceuticals, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Kiniksa Pharmaceuticals | 0 | 0 | 3 | 0 | 3.00 |
| Arena Pharmaceuticals | 0 | 0 | 15 | 0 | 3.00 |
Kiniksa Pharmaceuticals currently has a consensus target price of $37.00, indicating a potential upside of 109.16%. Arena Pharmaceuticals has a consensus target price of $91.80, indicating a potential upside of 38.48%. Given Kiniksa Pharmaceuticals' higher probable upside, research analysts plainly believe Kiniksa Pharmaceuticals is more favorable than Arena Pharmaceuticals.
Valuation and Earnings
This table compares Kiniksa Pharmaceuticals and Arena Pharmaceuticals' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Kiniksa Pharmaceuticals | N/A | N/A | $-161,870,000.00 | ($2.99) | -5.92 |
| Arena Pharmaceuticals | $806.43 million | 4.96 | $397.55 million | $7.69 | 8.62 |
Arena Pharmaceuticals has higher revenue and earnings than Kiniksa Pharmaceuticals. Kiniksa Pharmaceuticals is trading at a lower price-to-earnings ratio than Arena Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Summary
Arena Pharmaceuticals beats Kiniksa Pharmaceuticals on 8 of the 11 factors compared between the two stocks.
