OTCPK:ARTH

Stock Analysis Report

Executive Summary

Arch Therapeutics, Inc., together with its subsidiaries, operates as a biotechnology company in the United States.

Snowflake

Fundamentals

Moderate growth potential with worrying balance sheet.

Share Price & News

How has Arch Therapeutics's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-29.2%

ARTH

1.9%

US Medical Equipment

0.4%

US Market


1 Year Return

-60.3%

ARTH

15.6%

US Medical Equipment

6.9%

US Market

Return vs Industry: ARTH underperformed the US Medical Equipment industry which returned 15.6% over the past year.

Return vs Market: ARTH underperformed the US Market which returned 6.9% over the past year.


Shareholder returns

ARTHIndustryMarket
7 Day-29.2%1.9%0.4%
30 Day-37.3%-1.7%-1.1%
90 Day-47.9%-0.03%-0.5%
1 Year-60.3%-60.3%16.5%15.6%9.3%6.9%
3 Year-73.0%-73.0%72.1%66.9%45.8%36.4%
5 Year-9.5%-9.5%125.8%100.8%62.9%45.1%

Price Volatility Vs. Market

How volatile is Arch Therapeutics's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Arch Therapeutics undervalued compared to its fair value and its price relative to the market?


In this section, we usually try to help investors determine whether Arch Therapeutics is trading at an attractive price based on the cash flow it is expected to produce in the future. But as Arch Therapeutics has not provided consistent financial data, and the stock also has no analyst forecast or coverage, its intrinsic value cannot be reliably calculated by extrapolating past data or using analyst consensus cash flow predictions.

This is quite a rare situation as 89% of companies covered by Simply Wall St do have a valuation analysis.


Next Steps

  • Take a look at Arch Therapeutics's' forecasted future earnings and revenues from industry analysts to understand how the company is expected to perform in the future against its competitors and the wider market.
  • When valuing a company like this, investors focus more on how they perceive the size of the opportunity, the company's ability to deliver and scale, and the strength of the team. While we are not analysing this type of data at the moment, if you don’t know where to start, we recommend reading through Arch Therapeutics regulatory filings here.
  • Explore potentially undervalued companies in the Healthcare industry.

Future Growth

How is Arch Therapeutics forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

53.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARTH is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.7%).

Earnings vs Market: ARTH is forecast to become profitable over the next 3 year, which is considered above average market growth.

High Growth Earnings: ARTH's loss is forecast to worsen by 0% next year.

Revenue vs Market: Insufficient data to determine if ARTH's revenue is forecast to grow faster than the US market.

High Growth Revenue: Insufficient data to determine if ARTH's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: Insufficient data to determine if ARTH's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Arch Therapeutics performed over the past 5 years?

-4.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ARTH is unprofitable, and losses have increased over the past 5 years at a rate of -4.1% per year.

Accelerating Growth: Unable to compare ARTH's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ARTH is unprofitable, making it difficult to compare its past year earnings growth to the Medical Equipment industry (28.2%).


Return on Equity

High ROE: ARTH's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets

ROA vs Industry: ARTH is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: ARTH is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Arch Therapeutics's financial position?


Financial Position Analysis

Short Term Liabilities: ARTH has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: ARTH has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: ARTH is debt free.

Reducing Debt: ARTH's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: ARTH has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if ARTH's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: ARTH has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: ARTH has less than a year of cash runway if free cash flow continues to reduce at historical rates of -6.1% each year


Next Steps

Dividend

What is Arch Therapeutics's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate ARTH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ARTH's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if ARTH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ARTH's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ARTH's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Arch Therapeutics's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Terrence Norchi (54yo)

6.5yrs

Tenure

US$829,484

Compensation

Dr. Terrence W. Norchi, M.D., serves as Chairman of the Board at Arch Therapeutics, Inc. since July 19, 2018. She is the Co-Founder and Secretary of Arch Therapeutics, Inc. and has been its Chief Executiv ...


CEO Compensation Analysis

Compensation vs. Market: Insufficient data to establish whether Terrence's total compensation is reasonable compared to companies of similar size in the US market.

Compensation vs Earnings: Terrence's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.3yrs

Average Tenure

59.5yo

Average Age

Experienced Management: ARTH's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

1.3yrs

Average Tenure

54yo

Average Age

Experienced Board: ARTH's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Richard Davis (61yo)

    CFO & Treasurer

    • Tenure: 5.3yrs
    • Compensation: US$617.84k
  • Avtar Dhillon (58yo)

    Business Advisor

    • Tenure: 1.3yrs
    • Compensation: US$329.96k
  • Dan Wadsworth (65yo)

    Advisor & Consultant of Wound Care Commercialization

    • Tenure: 0yrs
  • Elaine Whitmore

    Regulatory Consultant & Advisor

    • Tenure: 0yrs
  • Steven Kates

    Vice President of Technology

    • Tenure: 0yrs
  • Terrence Norchi (54yo)

    Chairman

    • Tenure: 6.5yrs
    • Compensation: US$829.48k
  • Rutledge Ellis-Behnke

    Co-Founder & Scientific Advisor

    • Tenure: 0yrs
  • Dmitry Nepomnayshy

    Clinical Advisor

    • Tenure: 0.8yrs

Board Members

  • Jim Sulat (69yo)

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: US$134.64k
  • Punit Dhillon (39yo)

    Director

    • Tenure: 1.3yrs
    • Compensation: US$78.89k
  • Terrence Norchi (54yo)

    Chairman

    • Tenure: 6.5yrs
    • Compensation: US$829.48k

Company Information

Arch Therapeutics, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arch Therapeutics, Inc.
  • Ticker: ARTH
  • Exchange: OTCPK
  • Founded: 2006
  • Industry: Health Care Supplies
  • Sector: Healthcare
  • Market Cap: US$28.110m
  • Shares outstanding: 172.56m
  • Website: https://www.archtherapeutics.com

Number of Employees


Location

  • Arch Therapeutics, Inc.
  • 235 Walnut Street
  • Suite 6
  • Framingham
  • Massachusetts
  • 1702
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARTHOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJun 2013

Biography

Arch Therapeutics, Inc., together with its subsidiaries, operates as a biotechnology company in the United States. The company develops products based on its technology to stop bleeding and control leaking ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 00:34
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.