Critical Review: Arcus Biosciences (NYSE:RCUS) & Edesa Biotech (NASDAQ:EDSA)

Edesa Biotech (NASDAQ:EDSA) and Arcus Biosciences (NYSE:RCUS) are both healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Risk and Volatility

Edesa Biotech has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Arcus Biosciences has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

5.5% of Edesa Biotech shares are held by institutional investors. Comparatively, 92.9% of Arcus Biosciences shares are held by institutional investors. 24.4% of Edesa Biotech shares are held by company insiders. Comparatively, 7.6% of Arcus Biosciences shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Edesa Biotech and Arcus Biosciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Edesa Biotech	N/A	-286.52%	-75.36%
Arcus Biosciences	-156.36%	-68.97%	-35.27%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Edesa Biotech and Arcus Biosciences, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Edesa Biotech	1	0	1	1	2.67
Arcus Biosciences	1	3	8	0	2.58

Edesa Biotech presently has a consensus price target of $5.00, suggesting a potential downside of 6.72%. Arcus Biosciences has a consensus price target of $36.40, suggesting a potential upside of 26.34%. Given Arcus Biosciences’ higher probable upside, analysts plainly believe Arcus Biosciences is more favorable than Edesa Biotech.

Valuation & Earnings

This table compares Edesa Biotech and Arcus Biosciences”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Edesa Biotech	N/A	N/A	-$7.19 million	($1.34)	-4.00
Arcus Biosciences	$247.00 million	14.67	-$353.00 million	($3.18)	-9.06

Edesa Biotech has higher earnings, but lower revenue than Arcus Biosciences. Arcus Biosciences is trading at a lower price-to-earnings ratio than Edesa Biotech, indicating that it is currently the more affordable of the two stocks.

Summary

Edesa Biotech beats Arcus Biosciences on 8 of the 14 factors compared between the two stocks.

About Edesa Biotech

Edesa Biotech, Inc., a clinical-stage biopharmaceutical company, engages in the research and development, manufacture, and commercialization of pharmaceutical products for inflammatory and immune-related diseases. Its lead product candidates are EB05, a monoclonal antibody, which is in Phase 3 clinical study for the treatment of acute respiratory distress syndrome in Covid-19 patients; and EB01, a topical vanishing cream containing non-steroidal anti-inflammatory compound that has completed Phase 2b clinical study to treat chronic allergic contact dermatitis. The company also develops EB02, an extension of secretory phospholipase 2 anti-inflammatory cream for treating erythema, swelling, and exudation associated with hemorrhoids disease; and EB06, an anti- chemokine ligand 10 (CXCL10) monoclonal antibody in vitiligo. It has a collaboration agreement with NovImmune SA to develop monoclonal antibodies targeting products containing toll-like receptor 4 and CXCL10 for therapeutic, prophylactic, and diagnostic applications in humans and animals; and Yissum Research Development Company for the development of products for therapeutic, prophylactic, and diagnostic uses in topical dermal and anorectal applications, as well as for the use in dermatologic and gastrointestinal conditions. The company was founded in 2015 and is headquartered in Markham, Canada.

About Arcus Biosciences

Arcus Biosciences, Inc., a clinical-stage biopharmaceutical company, develops and commercializes cancer therapies in the United States. The company's pipeline products include Domvanalimab, an anti-TIGIT antibody, which is in Phase 2 and Phase 3 clinical trial; and AB308, an investigational anti-TIGIT monoclonal antibody, which is in Phase 1b clinical trial to study people with advanced solid and hematologic malignancies. It also develops Etrumadenant, a dual A2a/A2b adenosine receptor antagonist, which is in Phase 2 clinical trial; Quemliclustat, a small-molecule CD73 inhibitor, which is Phase 1b and Phase 2 clinical trial; Zimberelimab, an anti-PD-1 antibody, which is in Phase 2 clinical trial for metastatic cell lung cancer and monotherapy; and AB521, an oral and small-molecule inhibitor of HIF-2a, which is in Phase 1 clinical trial for the treatment of Von Hippel-Lindau disease. In addition, the company's preclinical pipeline products include AB598, a CD39 antibody; and AB801, a small molecule Axl inhibitor. It has a clinical collaboration with AstraZeneca to evaluate domvanalimab in combination with durvalumab in a registrational phase 3 clinical trial in patients with unresectable Stage 3 NSCLC; and BVF Partners L.P. to support the discovery and development of compounds for the treatment of inflammatory diseases. Arcus Biosciences, Inc. was incorporated in 2015 and is headquartered in Hayward, California.