Comprehensive Stock Comparison
Compare Zai Lab Limited (ZLAB) vs Arcutis Biotherapeutics, Inc. (ARQT) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | ARQT | 91.3% revenue growth vs ZLAB's 15.3% |
| Quality / Margins | ARQT | -4.3% net margin vs ZLAB's -38.1% |
| Stability / Safety | ZLAB | Beta 0.99 vs ARQT's 1.08 |
| Dividends | Tie | Neither pays a meaningful dividend |
| Momentum (1Y) | ARQT | +97.0% vs ZLAB's -44.5% |
| Efficiency (ROA) | ARQT | -3.7% ROA vs ZLAB's -15.0%, ROIC -5.2% vs -42.8% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Zai Lab is a biopharmaceutical company that licenses, develops, and commercializes innovative therapies for oncology, autoimmune disorders, and infectious diseases primarily in Greater China. It generates revenue through product sales of its commercialized drugs — like Zejula for ovarian cancer and NUZYRA for bacterial infections — supplemented by milestone payments and royalties from its extensive partnership network. The company's key advantage lies in its strategic licensing model that gives it exclusive rights to promising late-stage and commercial-stage therapies for the Greater China market, allowing it to build a diversified portfolio without bearing full R&D costs.
Arcutis Biotherapeutics is a biopharmaceutical company developing and commercializing topical treatments for inflammatory skin conditions like psoriasis, eczema, and dermatitis. It generates revenue primarily from product sales of its FDA-approved roflumilast cream for plaque psoriasis — ZORYVE — with additional pipeline candidates targeting other dermatological diseases. The company's competitive advantage lies in its specialized focus on topical formulations that offer targeted delivery with fewer systemic side effects compared to oral or injectable alternatives.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
ARQT leads in 4 of 6 categories — strongest in Financial Metrics and Valuation Metrics. 1 category is tied.
Financial Metrics (TTM)
ZLAB and ARQT operate at a comparable scale, with $460M and $376M in trailing revenue. ARQT is the more profitable business, keeping -4.3% of every revenue dollar as net income compared to ZLAB's -38.1%. On growth, ARQT holds the edge at +81.5% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | ZLABZai Lab Limited | ARQTArcutis Biotherap… |
|---|---|---|
| RevenueTrailing 12 months | $460M | $376M |
| EBITDAEarnings before interest/tax | -$218M | -$7M |
| Net IncomeAfter-tax profit | -$176M | -$16M |
| Free Cash FlowCash after capex | -$159M | -$6M |
| Gross MarginGross profit ÷ Revenue | +58.6% | +90.2% |
| Operating MarginEBIT ÷ Revenue | -49.9% | -3.3% |
| Net MarginNet income ÷ Revenue | -38.1% | -4.3% |
| FCF MarginFCF ÷ Revenue | -34.5% | -1.7% |
| Rev. Growth (YoY)Latest quarter vs prior year | +17.0% | +81.5% |
| EPS Growth (YoY)Latest quarter vs prior year | +43.8% | +2.5% |
Valuation Metrics
| Metric | ZLABZai Lab Limited | ARQTArcutis Biotherap… |
|---|---|---|
| Market CapShares × price | $21.3B | $3.3B |
| Enterprise ValueMkt cap + debt − cash | $20.8B | $3.3B |
| Trailing P/EPrice ÷ TTM EPS | -12.01x | -207.46x |
| Forward P/EPrice ÷ next-FY EPS est. | — | 73.47x |
| PEG RatioP/E ÷ EPS growth rate | — | — |
| EV / EBITDAEnterprise value multiple | — | — |
| Price / SalesMarket cap ÷ Revenue | 46.21x | 8.84x |
| Price / BookPrice ÷ Book value/share | 2.94x | 18.11x |
| Price / FCFMarket cap ÷ FCF | — | — |
Profitability & Efficiency
ARQT delivers a -8.5% return on equity — every $100 of shareholder capital generates $-9 in annual profit, vs $-25 for ZLAB. ARQT carries lower financial leverage with a 0.03x debt-to-equity ratio, signaling a more conservative balance sheet compared to ZLAB's 0.31x. On the Piotroski fundamental quality scale (0–9), ARQT scores 4/9 vs ZLAB's 3/9, reflecting mixed financial health.
| Metric | ZLABZai Lab Limited | ARQTArcutis Biotherap… |
|---|---|---|
| ROE (TTM)Return on equity | -24.5% | -8.5% |
| ROA (TTM)Return on assets | -15.0% | -3.7% |
| ROICReturn on invested capital | -42.8% | -5.2% |
| ROCEReturn on capital employed | -27.9% | -4.3% |
| Piotroski ScoreFundamental quality 0–9 | 3 | 4 |
| Debt / EquityFinancial leverage | 0.31x | 0.03x |
| Net DebtTotal debt minus cash | -$455M | -$37M |
| Cash & Equiv.Liquid assets | $680M | $43M |
| Total DebtShort + long-term debt | $224M | $6M |
| Interest CoverageEBIT ÷ Interest expense | -48.75x | -0.44x |
Total Returns (with DRIP)
A $10,000 investment in ARQT five years ago would be worth $7,712 today (with dividends reinvested), compared to $1,186 for ZLAB. Over the past 12 months, ARQT leads with a +97.0% total return vs ZLAB's -44.5%. The 3-year compound annual growth rate (CAGR) favors ARQT at 18.6% vs ZLAB's -19.7% — a key indicator of consistent wealth creation.
| Metric | ZLABZai Lab Limited | ARQTArcutis Biotherap… |
|---|---|---|
| YTD ReturnYear-to-date | +10.9% | -7.0% |
| 1-Year ReturnPast 12 months | -44.5% | +97.0% |
| 3-Year ReturnCumulative with dividends | -48.3% | +66.7% |
| 5-Year ReturnCumulative with dividends | -88.1% | -22.9% |
| 10-Year ReturnCumulative with dividends | -31.2% | +23.7% |
| CAGR (3Y)Annualised 3-year return | -19.7% | +18.6% |
Risk & Volatility
ZLAB is the less volatile stock with a 0.99 beta — it tends to amplify market swings less than ARQT's 1.08 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. ARQT currently trades 84.9% from its 52-week high vs ZLAB's 43.3% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | ZLABZai Lab Limited | ARQTArcutis Biotherap… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.99x | 1.08x |
| 52-Week HighHighest price in past year | $44.34 | $31.77 |
| 52-Week LowLowest price in past year | $15.96 | $11.86 |
| % of 52W HighCurrent price vs 52-week peak | +43.3% | +84.9% |
| RSI (14)Momentum oscillator 0–100 | 57.7 | 59.9 |
| Avg Volume (50D)Average daily shares traded | 622K | 1.2M |
Analyst Outlook
Wall Street rates ZLAB as "Buy" and ARQT as "Buy". Consensus price targets imply 82.1% upside for ZLAB (target: $35) vs 23.6% for ARQT (target: $33).
| Metric | ZLABZai Lab Limited | ARQTArcutis Biotherap… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $35.00 | $33.33 |
| # AnalystsCovering analysts | 11 | 12 |
| Dividend YieldAnnual dividend ÷ price | — | — |
| Dividend StreakConsecutive years of raises | — | — |
| Dividend / ShareAnnual DPS | — | — |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | 0.0% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Zai Lab Limited (ZLAB) | 100 | 28.99 | -71.0% |
| Arcutis Biotherapeu… (ARQT) | 100 | 93.32 | -6.7% |
Arcutis Biotherapeu… (ARQT) returned -23% over 5 years vs Zai Lab Limited (ZLAB)'s -88%.
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Zai Lab Limited (ZLAB) | $0.00 | $460M | — |
| Arcutis Biotherapeu… (ARQT) | $0.00 | $376M | — |
Zai Lab Limited's revenue grew from $0M (2016) to $460M (2025) — a 0.0% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2018 | 2025 | Change |
|---|---|---|---|
| Zai Lab Limited (ZLAB) | -1074.3% | -38.1% | +96.4% |
| Arcutis Biotherapeu… (ARQT) | -84.5% | -4.3% | +94.9% |
Zai Lab Limited's net margin went from -1074% (2018) to -38% (2025).
Chart 4EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Zai Lab Limited (ZLAB) | -39.7 | -1.6 | +96.0% |
| Arcutis Biotherapeu… (ARQT) | -4.71 | -0.13 | +97.2% |
Zai Lab Limited's EPS grew from $-39.70 (2016) to $-1.60 (2025).
Chart 5Free Cash Flow — 5 Years
Zai Lab Limited generated $-159M FCF in 2025 (+72% vs 2021). Arcutis Biotherapeutics, Inc. generated $-6M FCF in 2025 (+96% vs 2021).
ZLAB vs ARQT: Frequently Asked Questions
8 questions · data-driven answers · updated daily
01Is ZLAB or ARQT a better buy right now?
Analysts rate Zai Lab Limited (ZLAB) a "Buy" — based on 11 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which is the better long-term investment — ZLAB or ARQT?
Over the past 5 years, Arcutis Biotherapeutics, Inc. (ARQT) delivered a total return of -22.9%, compared to -88.1% for Zai Lab Limited (ZLAB). A $10,000 investment in ARQT five years ago would be worth approximately $8K today (assuming dividends reinvested). Over 10 years, the gap is even starker: ARQT returned +23.7% versus ZLAB's -31.2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
03Which is safer — ZLAB or ARQT?
By beta (market sensitivity over 5 years), Zai Lab Limited (ZLAB) is the lower-risk stock at 0.99β versus Arcutis Biotherapeutics, Inc.'s 1.08β — meaning ARQT is approximately 9% more volatile than ZLAB relative to the S&P 500. On balance sheet safety, Arcutis Biotherapeutics, Inc. (ARQT) carries a lower debt/equity ratio of 3% versus 31% for Zai Lab Limited — giving it more financial flexibility in a downturn.
04Which has better profit margins — ZLAB or ARQT?
Arcutis Biotherapeutics, Inc. (ARQT) is the more profitable company, earning -4.3% net margin versus -38.1% for Zai Lab Limited — meaning it keeps -4.3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: ARQT leads at -3.3% versus -49.9% for ZLAB. At the gross margin level — before operating expenses — ARQT leads at 90.2%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
05Is ZLAB or ARQT more undervalued right now?
Analyst consensus price targets imply the most upside for ZLAB: 82.1% to $35.00.
06Which pays a better dividend — ZLAB or ARQT?
None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.
07Is ZLAB or ARQT better for a retirement portfolio?
For long-horizon retirement investors, Zai Lab Limited (ZLAB) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.99)). Both have compounded well over 10 years (ZLAB: -31.2%, ARQT: +23.7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
08What are the main differences between ZLAB and ARQT?
Both stocks operate in the Healthcare sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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