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Arcutis Biotherapeutics (ARQT)
NASDAQ:ARQT
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Arcutis Biotherapeutics
(NASDAQ:ARQT)
54Neutral
Positive Factors
Market Position
Zoryve is now the most prescribed branded non-steroidal topical treatment across major inflammatory skin conditions in the US, indicating strong market penetration.
Product Launch and Acceptance
The launch of Zoryve foam and cream 0.15% has successfully boosted product sales, demonstrating strong market acceptance.
Negative Factors
Insurance Coverage Issue
Management expects insurance switching to lead to a coverage gap affecting Zoryve prescriptions in the first quarter.
Arcutis Biotherapeutics (ARQT) vs. S&P 500 (SPY)
Market Cap
$1.84B
Dividend YieldN/A
Average Volume (3M)2.35M
Price to Earnings (P/E)―
Beta (1Y)2.18
Revenue Growth229.74%
EPS Growth70.23%
CountryUS
Employees296
SectorHealthcare
Sector Strength78
IndustryBiotechnology
Share Statistics
EPS (TTM)-1.16
Shares Outstanding118,638,240
10 Day Avg. Volume2,513,892
30 Day Avg. Volume2,354,194
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)8.68
Price to Cash Flow (P/CF)-570.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.67Price Target Upside20.53% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Arcutis Biotherapeutics Business Overview & Revenue Model
Company DescriptionArcutis Biotherapeutics, Inc. engages in the development and commercialization of treatments for dermatological diseases. Its piepline consists of topical treatments for plaque psoriasis, atopic dermatitis, eczema, vitiligo, alopecia areata, and seborrheic dermatitis. The company was founded by Bhaskar Chaudhuri and David W. Osborne on June 1, 2016 and is headquartered in Westlake Village, CA.
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 shows strong revenue growth, especially in ZORYVE sales, but struggles with profitability and cash flow sustainability. The reduction in leverage is positive, but ongoing negative net income and free cash flow are concerns.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 |
| 3.38M | 205.92M | 202.54M | 77.56M | 4.96M | Net Debt |
| -67.95M | 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
15.49
Price Trends
13.55
Positive
12.28
Positive
10.90
Positive
Market Momentum
0.51
Negative
60.00
Neutral
83.40
Negative
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 15.49 is above the 20-day moving average (MA) of 13.49, above the 50-day MA of 13.55, and above the 200-day MA of 10.90, indicating a bullish trend. The MACD of 0.51 indicates Negative momentum. The RSI at 60.00 is Neutral, neither overbought nor oversold. The STOCH value of 83.40 is Negative, 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $13.45B | 32.05 | 8.05% | ― | 17.35% | 151.40% | |
54 Neutral | $1.84B | ― | -113.76% | ― | 229.74% | 70.23% | |
49 Neutral | $178.07M | ― | -84.46% | ― | -40.09% | -18.67% | |
49 Neutral | $6.90B | 0.02 | -54.05% | 2.46% | 24.91% | -3.14% | |
45 Neutral | $591.93M | ― | -42.91% | ― | ― | 2.90% | |
42 Neutral | $241.55M | ― | -31.41% | ― | 389.82% | -22.66% | |
39 Underperform | $107.58M | ― | -129.58% | ― | -27.69% | -27.91% |
* Healthcare Sector Average
Performance Comparison
ARQT
Arcutis Biotherapeutics
15.16
4.22
38.57%
BMRN
BioMarin Pharmaceutical
70.54
-13.85
-16.41%
XOMA
Xoma
21.16
-4.61
-17.89%
ACRS
Aclaris Therapeutics
1.59
0.44
38.26%
KURA
Kura Oncology
7.71
-14.27
-64.92%
DERM
Journey Medical Corp
5.31
1.84
53.03%
Arcutis Biotherapeutics Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 26.97% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong performance driven by significant revenue growth, successful product launches, and expanded Medicaid coverage. However, challenges such as Q1 revenue fluctuations, Medicare Part D negotiations, and minimal contribution from the Kowa partnership were noted. The sentiment is balanced with optimism for future growth.Highlights
Strong Revenue Growth
Arcutis reported $71 million in Q4 revenue with $69 million from the ZORYVE franchise, resulting in 471% year-over-year growth in ZORYVE product sales, reaching $167 million annually.
Expansion of ZORYVE Indications
ZORYVE foam was launched for seborrheic dermatitis and ZORYVE cream for atopic dermatitis. Upcoming PDUFA date in May 2025 for scalp and body psoriasis further broadens potential patient base.
Strong Prescription Volume Growth
ZORYVE prescription volume reached a new high with 16,000 weekly scripts in Q4, reflecting a 44% increase from the previous quarter and 334% growth year-over-year.
Success in Medicaid Coverage
Arcutis secured Medicaid coverage in states representing approximately 1 in 2 Medicaid beneficiaries, enhancing access to ZORYVE.
Notable Partnership
Arcutis partnered with Odell Beckham Jr. to increase awareness of seborrheic dermatitis and ZORYVE foam, generating over 1.5 billion media impressions within the first week.
Lowlights
Q1 Gross-to-Net Fluctuations
Expected typical Q1 gross-to-net impact due to deductible resets and insurance plan changes, which may affect net product revenue.
Challenges with Medicare Part D
Negotiations with Medicare Part D are delayed due to the implementation of the Inflation Reduction Act, affecting the timeline for improved access.
Minimal Contribution from Kowa Partnership in 2024
The partnership with Kowa, focused on primary care and pediatricians, did not significantly contribute to revenue growth in 2024, with meaningful contributions expected in 2025.
Potential IP Challenges
Upcoming claim construction hearing in ongoing IP lawsuits, creating uncertainty about the protection of ZORYVE's intellectual property.
Company Guidance
During the Arcutis Biotherapeutics 2024 Fourth Quarter and Full Year Financial Results Conference Call, the company outlined several key performance metrics and strategic goals for the upcoming year. The company reported $71 million in quarterly revenues, with $69 million derived from the ZORYVE franchise, including a $4 million nonrecurring adjustment. For the full year, revenues totaled $197 million, marking a significant 471% growth year-over-year in ZORYVE product sales. Looking forward to 2025, Arcutis plans to expand ZORYVE's indications, particularly with the anticipated PDUFA for scalp and body psoriasis slated for May 22, 2025. The company also emphasized the shift from topical steroids to non-steroidal options and aims to penetrate the government payer segment, with Medicaid coverage now reaching approximately half of the beneficiaries. Arcutis is focusing on leveraging its commercial partnership with Kowa to expand prescriber base beyond dermatology and noted a strong execution in securing insurance coverage, with gross-to-net ratios expected to remain steady in the 50s throughout 2025. The company projects continued revenue growth and aims to achieve cash break-even by 2026.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.