Contrasting Arrowhead Pharmaceuticals (NASDAQ:ARWR) and Kura Oncology (NASDAQ:KURA)

Kura Oncology (NASDAQ:KURA) and Arrowhead Pharmaceuticals (NASDAQ:ARWR) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Profitability

This table compares Kura Oncology and Arrowhead Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kura Oncology	N/A	-33.54%	-30.90%
Arrowhead Pharmaceuticals	-69.38%	-42.79%	-21.74%

Valuation and Earnings

This table compares Kura Oncology and Arrowhead Pharmaceuticals’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kura Oncology	N/A	N/A	-$135.84 million	($2.02)	-4.73
Arrowhead Pharmaceuticals	$243.23 million	12.37	-$176.06 million	($1.71)	-16.41

Kura Oncology has higher earnings, but lower revenue than Arrowhead Pharmaceuticals. Arrowhead Pharmaceuticals is trading at a lower price-to-earnings ratio than Kura Oncology, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Kura Oncology and Arrowhead Pharmaceuticals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kura Oncology	0	1	7	0	2.88
Arrowhead Pharmaceuticals	0	5	11	0	2.69

Kura Oncology currently has a consensus target price of $27.31, suggesting a potential upside of 185.70%. Arrowhead Pharmaceuticals has a consensus target price of $54.53, suggesting a potential upside of 94.35%. Given Kura Oncology’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Kura Oncology is more favorable than Arrowhead Pharmaceuticals.

Insider & Institutional Ownership

66.0% of Arrowhead Pharmaceuticals shares are owned by institutional investors. 5.4% of Kura Oncology shares are owned by company insiders. Comparatively, 5.0% of Arrowhead Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Kura Oncology has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Arrowhead Pharmaceuticals has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Summary

Kura Oncology beats Arrowhead Pharmaceuticals on 7 of the 13 factors compared between the two stocks.

About Kura Oncology

Kura Oncology, Inc., a clinical-stage biopharmaceutical company, develops medicines for the treatment of cancer in the United States. The company's pipeline consists of small molecule product candidates that target cancer. Its lead product candidates are ziftomenib, a small molecule inhibitor of the menin-Lysine K-specific Methyltransferase 2A protein-protein interaction for the treatment of genetically defined subsets of acute leukemias, including acute myeloid leukemia and acute lymphoblastic leukemia; and tipifarnib, an orally bioavailable inhibitor of farnesyl transferase for the treatment of solid tumors and hematologic indications. The company has a clinical collaboration with Novartis to evaluate the combination of tipifarnib and alpelisib in patients with head and neck squamous cell carcinoma whose tumors have HRAS overexpression or PIK3CA mutation and/or amplification. Kura Oncology, Inc. was founded in 2014 and is headquartered in San Diego, California.

About Arrowhead Pharmaceuticals

Arrowhead Pharmaceuticals, Inc. develops medicines for the treatment of intractable diseases in the United States. The company's products in pipeline includes ARO-AAT, a RNA interference (RNAi) therapeutic candidate that is in phase II clinical trial for the treatment of liver diseases associated with alpha-1 antitrypsin deficiency; ARO-APOC3, which is in phase 2b and one phase 3 clinical trial to treat hypertriglyceridemia; ARO-ANG3 that is in phase 2b clinical trial for the treatment of dyslipidemia; ARO-HSD, which is completed phase 1/2 clinical trial to treat liver diseases; ARO-ENaC2, which is in pre-clinical stage for the treatment of dyslipidemia cystic fibrosis; ARO-C3 that is in phase 1/2a clinical trial to reduce production of complement component 3; ARO-DUX4, which is in pre-clinical stage for the treatment of facioscapulohumeral muscular dystrophy; ARO-XDH that is in phase 1 clinical trial to treat uncontrolled gout; ARO-COV, which is in pre-clinical stage for the treatment of COVID-19; ARO-RAGE, which is in phase 1/2a clinical trial to treat muco-obstructive or inflammatory pulmonary conditions; and ARO-MMP7 that is in phase 1/2a clinical trial for treatment of idiopathic pulmonary fibrosis. It is also involved in the development of JNJ-3989, a subcutaneously administered RNAi therapeutic candidate to treat chronic hepatitis B virus infection; Olpasiran to reduce the production of apolipoprotein A; and ARO-AMG1 for treating genetically validated cardiovascular targets. Arrowhead Pharmaceuticals, Inc. has a license and research collaboration agreement with Janssen Pharmaceuticals, Inc. to develop JNJ-75220795, ARO-JNJ2, and ARO-JNJ3 RNAi therapeutics for liver-expressed targets; and license and research collaboration agreement with Takeda Pharmaceuticals U.S.A., Inc. to develop RNAi therapeutic candidate as a treatment for liver disease. Arrowhead Pharmaceuticals, Inc. was incorporated in 1989 and is headquartered in Pasadena, California.