Financial Analysis: Zentek (NASDAQ:ZTEK) and ARQ (NASDAQ:ARQ)

Zentek (NASDAQ:ZTEK) and ARQ (NASDAQ:ARQ) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Institutional & Insider Ownership

0.8% of Zentek shares are owned by institutional investors. Comparatively, 18.5% of ARQ shares are owned by institutional investors. 22.2% of ARQ shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Zentek and ARQ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zentek	N/A	-44.98%	-40.90%
ARQ	-12.35%	-8.35%	-6.16%

Volatility & Risk

Zentek has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, ARQ has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Zentek and ARQ, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zentek	0	0	0	0	N/A
ARQ	0	0	0	0	N/A

Valuation and Earnings

This table compares Zentek and ARQ’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zentek	$50,000.00	2,258.37	-$10.90 million	($0.07)	-16.00
ARQ	$99.18 million	2.32	-$12.25 million	($0.50)	-13.76

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

Summary

ARQ beats Zentek on 7 of the 11 factors compared between the two stocks.

About Zentek

Zentek Ltd. engages in the research and development of graphene and related nanomaterials in Canada. It owns 100% interest in the Albany Graphite project located in Northern Ontario, Canada. The company develops graphene-based antimicrobial coating under the ZenGUARD brand, surgical masks, HVAC filters, personal protective equipment, rapid detection point of care diagnostics tests, and pharmaceutical products based on graphene-based compound. In addition, it develops graphene oxide synthesis and graphene synthesis. The company was formerly known as ZEN Graphene Solutions Ltd. and changed its name to Zentek Ltd. in October 2021. Zentek Ltd. was incorporated in 2008 and is headquartered in Guelph, Canada.

About ARQ

Arq, Inc. produces activated carbon products in North America. The company's products include granular activated carbon, powdered and granular activated carbon, and colloidal carbon products; Arq Powder Wetcake, a fine and low-ash coal waste-derived particle; and additives for air emissions control. Its products are used in various applications, including water treatment, ground water remediation, soil sediments, air emissions, and asphalt additives. The company was formerly known as Advanced Emissions Solutions, Inc. and changed its name to Arq, Inc. in February 2024. Arq, Inc. was founded in 1997 and is headquartered in Greenwood Village, Colorado.