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Arcutis Biotherapeutics (ARQT)
NASDAQ:ARQT
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Arcutis Biotherapeutics
(NASDAQ:ARQT)
51Neutral
Positive Factors
Financial Performance
Zoryve franchise generated sales of $63.8MM with strength across the entire franchise despite usual seasonality.
Market Position
Zoryve is currently the leader of the branded anti-inflammatory topical class and can address a total of approximately 17 million patients.
Negative Factors
Earnings Estimate
The FY25 PsO estimate was lowered from $135M to $118M on account of 1Q25 performance.
Sales Performance
Zoryve sales of $64M were modestly below expectations for the quarter based on lower PsO sales than estimated.
Arcutis Biotherapeutics (ARQT) vs. S&P 500 (SPY)
Market Cap
$1.61B
Dividend YieldN/A
Average Volume (3M)2.40M
Price to Earnings (P/E)―
Beta (1Y)1.52
Revenue Growth100.03%
EPS Growth64.22%
CountryUS
Employees342
SectorHealthcare
Sector Strength48
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.20
Shares Outstanding119,201,720
10 Day Avg. Volume2,197,068
30 Day Avg. Volume2,395,427
Financial Highlights & Ratios
PEG Ratio-0.34
Price to Book (P/B)10.73
Price to Sales (P/S)0.00
P/FCF Ratio-13.75
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue2.88
Enterprise Value/Gross Profit9.31
Enterprise Value/Ebitda-2.67
Forecast
1Y Price Target
$19.14Price Target Upside33.01% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Arcutis Biotherapeutics Business Overview & Revenue Model
Company DescriptionArcutis Biotherapeutics, Inc., a biopharmaceutical company, focuses on developing and commercializing treatments for dermatological diseases. Its lead product candidate is ARQ-151, a topical roflumilast cream that has completed Phase III clinical trials for the treatment of plaque psoriasis and atopic dermatitis. The company is also developing ARQ-154, a topical foam formulation of roflumilast for the treatment of seborrheic dermatitis and scalp psoriasis; ARQ-252, a selective topical janus kinase type 1 inhibitor for hand eczema and vitiligo; and ARQ-255, a topical formulation of ARQ-252 designed to reach deeper into the skin in order to treat alopecia areata. The company was formerly known as Arcutis, Inc. and changed its name to Arcutis Biotherapeutics, Inc. in October 2019. Arcutis Biotherapeutics, Inc. was incorporated in 2016 and is headquartered in Westlake Village, California.
How the Company Makes MoneyArcutis Biotherapeutics makes money primarily through the research, development, and commercialization of its dermatological therapies. The company's revenue model is centered around the successful approval and market launch of its proprietary drugs. Key revenue streams include product sales, licensing agreements, and potential collaborations with other biopharmaceutical companies for co-development or distribution. Significant factors contributing to its earnings involve strategic partnerships with pharmaceutical companies that can aid in expanding market reach and accelerating product availability. Additionally, Arcutis may secure funding through investor capital to support its research and development activities.
Arcutis Biotherapeutics Financial Statement Overview
Summary
Arcutis Biotherapeutics exhibits strong revenue growth, with revenues jumping significantly. However, profitability remains a challenge due to negative net income and EBIT margins. The balance sheet shows reduced leverage, but negative operating cash flow indicates ongoing cash flow issues.Income Statement
Arcutis Biotherapeutics has shown significant revenue growth with a jump from $3.7M in 2022 to $196.5M in 2024, indicating strong top-line expansion. However, the company remains unprofitable with consistent negative net income and EBIT margins, which reflects challenges in achieving operational efficiency and profitability.45
Neutral
Balance Sheet
The balance sheet indicates a stable financial position with a debt-to-equity ratio decreasing from 0.97 in 2022 to 0.02 in 2024, showing reduced leverage. The equity ratio remains moderate, but the negative net income impacts return on equity, which continues to be negative, highlighting profitability concerns.55
Neutral
Cash Flow
The cash flow statement reveals negative operating cash flow, suggestive of operational challenges. While the company has improved free cash flow slightly from 2023 to 2024, it remains negative, indicating ongoing cash flow issues despite financing activities.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 196.54M | 59.61M | 3.69M | 0.00 | 0.00 | Gross Profit |
| 177.41M | 54.62M | 2.93M | -763.00K | -455.00K | EBIT |
| -128.40M | -241.10M | -301.63M | -206.53M | -136.65M | EBITDA |
| -109.63M | -227.43M | -294.55M | -205.59M | -135.22M | Net Income Common Stockholders |
| -140.04M | -262.14M | -321.29M | -205.90M | -135.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 227.96M | 271.86M | 409.59M | 387.06M | 284.44M | Total Assets |
| 348.89M | 341.37M | 449.27M | 408.15M | 298.27M | Total Debt |
| 110.58M | 205.92M | 202.54M | 77.56M | 4.96M | Net Debt |
| 39.25M | 117.52M | 148.90M | -18.89M | -60.12M | Total Liabilities |
| 191.35M | 252.70M | 239.69M | 110.47M | 27.65M | Stockholders Equity |
| 157.54M | 88.67M | 209.58M | 297.68M | 270.62M |
| Cash Flow | Free Cash Flow | |||
| -112.30M | -247.49M | -281.00M | -175.62M | -113.35M | Operating Cash Flow |
| -112.16M | -247.06M | -257.71M | -174.63M | -113.03M | Investing Cash Flow |
| 28.82M | 180.23M | -87.20M | -75.95M | -181.82M | Financing Cash Flow |
| 66.20M | 101.32M | 301.80M | 281.95M | 298.14M |
Arcutis Biotherapeutics Technical Analysis
Positive
14.39
Price Trends
14.77
Negative
14.16
Positive
12.10
Positive
Market Momentum
-0.11
Positive
50.38
Neutral
42.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARQT, the sentiment is Positive. The current price of 14.39 is above the 20-day moving average (MA) of 14.11, below the 50-day MA of 14.77, and above the 200-day MA of 12.10, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 50.38 is Neutral, neither overbought nor oversold. The STOCH value of 42.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARQT.
Arcutis Biotherapeutics Risk Analysis
Arcutis Biotherapeutics disclosed 73 risk factors in its most recent earnings report. Arcutis Biotherapeutics reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arcutis Biotherapeutics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.96B | 12.98 | 24.71% | ― | 20.62% | 14.08% | |
64 Neutral | $1.48B | ― | -5.78% | ― | 25.50% | 64.63% | |
54 Neutral | $2.16B | ― | -31.51% | ― | ― | ― | |
52 Neutral | $5.21B | 3.49 | -43.30% | 2.83% | 14.70% | -0.24% | |
52 Neutral | $1.76B | ― | -86.10% | ― | 29.32% | -11.00% | |
51 Neutral | $1.61B | ― | -70.58% | ― | 100.03% | 64.22% | |
45 Neutral | $2.09B | ― | -35.21% | ― | -100.00% | -144.79% |
* Healthcare Sector Average
Performance Comparison
ARQT
Arcutis Biotherapeutics
14.39
6.40
80.10%
DNLI
Denali Therapeutics
14.80
-4.50
-23.32%
HRMY
Harmony Biosciences Holdings
35.65
5.43
17.97%
IMCR
Immunocore Holdings
29.54
-27.45
-48.17%
NAMS
NewAmsterdam Pharma Company
19.22
-0.99
-4.90%
RXRX
Recursion Pharmaceuticals
4.64
-4.84
-51.05%
Arcutis Biotherapeutics Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 0.49%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by Arcutis with significant revenue growth and positive developments in their pipeline and market expansion. However, there are challenges related to increased SG&A expenses and typical first-quarter revenue declines. The overall sentiment is bolstered by the strategic management of IP and positive prescription trends despite seasonal challenges.Q1-2025 Updates
Positive Updates
Record Revenue Growth
Arcutis reported first-quarter revenues of $63.8 million, reflecting a 196% growth year-over-year and nearly doubling revenues, excluding a previous non-recurring adjustment.
ZORYVE Demand Growth
Despite typical Q1 headwinds, ZORYVE prescription demand grew 10% compared to Q4 2024, demonstrating robust market presence.
Expansion in Insurance Coverage
Approximately 80% of ZORYVE prescriptions are reimbursed, reflecting strong insurance coverage across the portfolio.
Pipeline Progress
Anticipated upcoming approvals for ZORYVE foam for scalp and body psoriasis and ZORYVE cream for atopic dermatitis, demonstrating ongoing R&D advancements.
Intellectual Property Protection
Arcutis successfully extended the 30-month Hatch-Waxman stay by agreeing to stay patent litigation with Padagis, reinforcing their confidence in their patent portfolio.
Negative Updates
Slight Revenue Decline Compared to Q4
First-quarter revenues showed a slight 2% decline compared to Q4 2024 due to typical first-quarter deductible resets and insurance changes.
SG&A Expenses Increase
SG&A expenses increased by 17% year-over-year and 11% compared to the previous quarter, driven by investments in commercial launches.
Gross to Net Fluctuations
Gross to net ratios experienced fluctuations early in the quarter due to insurance deductible resets, though they stabilized later in the quarter.
Company Guidance
During Arcutis Biotherapeutics' Q1 2025 earnings call, the company reported robust financial performance with revenues of $63.8 million, nearly doubling year-over-year, despite a typical Q1 decline due to insurance deductible resets. Prescription demand grew by 10% compared to Q4 2024, reflecting strong commercial execution. The company highlighted significant growth opportunities, particularly through the anticipated approval of ZORYVE foam for scalp and body psoriasis on May 22, 2025, and ZORYVE cream for atopic dermatitis in young children by October 2025. Arcutis also addressed intellectual property protection efforts, noting a stay in litigation with Padagis. The firm maintained an 80% insurance coverage rate for ZORYVE prescriptions and expects to achieve cash breakeven by 2026, supported by its strong balance sheet and continued growth in the dermatology market.Arcutis Biotherapeutics Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Arcutis Biotherapeutics Appoints New Chief Financial Officer
Positive
Apr 10, 2025
On April 10, 2025, Arcutis Biotherapeutics announced the appointment of Latha Vairavan as the new Chief Financial Officer, succeeding David Topper, who is retiring. This transition is part of a planned succession, with Vairavan bringing over 20 years of experience in finance and accounting within the biotech industry. Her appointment is expected to continue strengthening Arcutis’ financial operations and support its growth in the immuno-dermatology market. The company has also outlined the terms of Vairavan’s compensation and severance package, highlighting her pivotal role in the company’s future strategic direction.
Spark’s Take on ARQT Stock
According to Spark, TipRanks’ AI Analyst, ARQT is a Neutral.
Arcutis Biotherapeutics’ overall score is driven by significant revenue growth and positive technical momentum, indicating market optimism. However, ongoing profitability and cash flow challenges, combined with a negative valuation metric, temper the overall outlook. The balanced sentiment from the earnings call suggests potential for future growth, but also highlights operational challenges and uncertainties in Medicare negotiations.
To see Spark’s full report on ARQT stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.