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Arcutis Biotherapeutics
(NASDAQ:ARQT)
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Rating:72Outperform
Price Target:
$32.00
▲(17.00% Upside)
Action:Upgraded
Date:07/18/26
ARQT scores strongest on improving financial performance (turn to positive operating/free cash flow, very high gross margins, improving operating profitability) and supportive technicals (price above key moving averages with positive MACD). The overall score is held back by weak valuation signals (highly negative P/E and no dividend yield) and execution risks noted on the earnings call, including gross-to-net pressure, higher near-term operating spend, and limited Part D access.
Positive Factors
Very high gross margins
Sustained ~91% gross margins imply strong product economics for topical franchises, enabling scale-driven operating leverage. High margins provide durable capacity to absorb commercial and R&D investment and can support long-term profitability even if net realizations face pressure from rebates.
Negative Factors
Substantial gross-to-net discounts
Persistent gross-to-net in the low-to-mid 50s materially reduces net realized price and can compress margins as sales scale. This structural payer-driven discounting makes profitability sensitive to formulary position shifts and requires sustained pricing/payer strategy to protect long-term margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Very high gross margins
Sustained ~91% gross margins imply strong product economics for topical franchises, enabling scale-driven operating leverage. High margins provide durable capacity to absorb commercial and R&D investment and can support long-term profitability even if net realizations face pressure from rebates.
Read all positive factors
Arcutis Biotherapeutics (ARQT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.50B
Dividend YieldN/A
Average Volume (3M)1.61M
Price to Earnings (P/E)―
Beta (1Y)0.71
Revenue Growth95.29%
EPS Growth98.21%
CountryUS
Employees354
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.02
Shares Outstanding125,083,374
10 Day Avg. Volume1,201,154
30 Day Avg. Volume1,611,591
Financial Highlights & Ratios
PEG Ratio2.52
Price to Book (P/B)19.50
Price to Sales (P/S)9.82
P/FCF Ratio-585.47
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$34.86Price Target Upside27.45% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)0.22
Revenue Forecast (FY)$500.05M
Arcutis Biotherapeutics Business Overview & Revenue Model
Company Description
Arcutis Biotherapeutics, Inc. is a biopharmaceutical firm dedicated to developing and marketing therapies for a range of skin-related diseases. The company's flagship investigational compound, ARQ-151, a roflumilast cream administered topically, h...
How the Company Makes Money
Arcutis primarily makes money by selling its prescription dermatology product ZORYVE through the U.S. pharmaceutical market. Revenue is generated from net product sales to wholesalers and specialty pharmacies, which then distribute to retail pharm...
Arcutis Biotherapeutics Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call described strong underlying commercial momentum and meaningful clinical and pipeline progress: 65% YoY revenue growth, share gains, positive operating cash flow, pediatric submissions, and initiation of ARQ-234 Phase I. These positives are tempered by a seasonality- and weather-driven Q1 demand dip (-6% QoQ for ZORYVE), continued material gross-to-net pressure (in the 50s), near-term SG&A/R&D increases, and limited Part D coverage today. Management emphasized that recent investments (sales force expansion, PCP/pediatric build, DTC) will drive demand in H2 2026 and a larger inflection in 2027, and they maintained full-year guidance of $480M–$495M.Positive Updates
Strong Revenue Growth
Net product revenues of $105.4M in Q1 2026, up 65% year-over-year, driven primarily by increased patient demand and improved gross-to-net performance.
Negative Updates
Q1 Seasonality and Weather-Related Demand Headwind
Q1 experienced customary seasonality amplified by severe weather events, generating a larger sequential revenue decline from Q4 to Q1 than in 2025; ZORYVE prescriptions declined ~6% quarter-over-quarter while branded non-steroidal topicals collectively fell ~15%.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Revenue Growth
Net product revenues of $105.4M in Q1 2026, up 65% year-over-year, driven primarily by increased patient demand and improved gross-to-net performance.
Read all positive updates
Company Guidance
Management reiterated full‑year 2026 revenue guidance of $480–$495 million and said gross‑to‑net should remain in the 50s, improving from high‑50s early in the year to the low‑50s by year‑end; they expect quarter‑over‑quarter net sales growth in Q2. In Q1 they reported net product revenue of $105.4M (+65% YoY), gross‑to‑net in the 50s, cost of sales $9.8M, R&D $30.6M (including a $10M milestone), SG&A $74.1M, and net cash provided by operations $2.2M; cash and marketable securities were $224.3M, total debt $101.5M with a $50M draw option through mid‑2026. Commercial metrics supporting the guidance included ~21,000 weekly prescriptions (IQVIA), a Q1 Rx decline of 6% vs Q4 (vs −15% for other branded non‑steroidal topicals), ZORYVE share of branded non‑steroidal topical prescriptions 48% (up 3 pts), ~45% refills, NBRx share 48%, and Q2‑to‑date scripts through April 24 up ~13% vs Q1; management expects modest SG&A increases in H2 to fund salesforce expansions (derm expansion in the field now; PCP/pediatric team launching in Q3 with initial demand impact in Q4) and to maintain positive cash flow through 2026.Arcutis Biotherapeutics Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
83
Very Positive
Cash Flow
69
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 415.62M | 376.07M | 196.54M | 59.61M | 3.69M | 0.00 |
| Gross Profit | 377.98M | 339.38M | 177.41M | 54.62M | 2.93M | -763.00K |
| EBITDA | 15.03M | 2.48M | -109.63M | -227.43M | -294.55M | -205.59M |
| Net Income | -2.38M | -16.14M | -140.04M | -262.14M | -311.46M | -206.36M |
Balance Sheet | ||||||
| Total Assets | 460.00M | 432.97M | 348.89M | 341.37M | 449.27M | 408.15M |
| Cash, Cash Equivalents and Short-Term Investments | 224.00M | 220.98M | 227.96M | 271.86M | 409.59M | 388.60M |
| Total Debt | 114.67M | 6.27M | 110.58M | 205.92M | 202.54M | 77.56M |
| Total Liabilities | 270.36M | 243.49M | 191.35M | 252.70M | 239.69M | 110.47M |
| Stockholders Equity | 189.65M | 189.48M | 157.54M | 88.67M | 209.58M | 297.68M |
Cash Flow | ||||||
| Free Cash Flow | 26.92M | -6.31M | -112.30M | -247.49M | -281.00M | -175.62M |
| Operating Cash Flow | 26.99M | -5.63M | -112.16M | -247.06M | -257.71M | -174.63M |
| Investing Cash Flow | -53.34M | -30.25M | 28.82M | 180.23M | -87.20M | -75.95M |
| Financing Cash Flow | 7.64M | 6.97M | 66.20M | 101.32M | 301.80M | 281.95M |
Arcutis Biotherapeutics Technical Analysis
Neutral
27.35
Price Trends
25.34
Positive
24.12
Positive
25.31
Positive
Market Momentum
0.75
Positive
54.39
Neutral
47.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARQT, the sentiment is Neutral. The current price of 27.35 is below the 20-day moving average (MA) of 27.70, above the 50-day MA of 25.34, and above the 200-day MA of 25.31, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 54.39 is Neutral, neither overbought nor oversold. The STOCH value of 47.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ARQT.
Arcutis Biotherapeutics Risk Analysis
Arcutis Biotherapeutics disclosed 72 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.08B | 13.98 | 17.19% | ― | 20.71% | -5.53% | |
72 Outperform | $3.50B | -1,398.96 | -1.41% | ― | 95.29% | 98.21% | |
59 Neutral | $5.33B | -114.06 | -26.79% | ― | 96.03% | 82.27% | |
56 Neutral | $2.56B | -51.79 | -14.19% | ― | 128.99% | 58.46% | |
54 Neutral | $1.61B | -2.50 | -54.32% | ― | 11.07% | 32.35% | |
52 Neutral | $3.03B | -11.67 | -37.17% | ― | ― | -47.00% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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Arcutis Biotherapeutics Corporate Events
Business Operations and StrategyExecutive/Board Changes
Arcutis Biotherapeutics Adds Veteran Director to Board
Positive
Jul 17, 2026
On July 15, 2026, Arcutis Biotherapeutics’ board expanded from nine to ten directors and appointed Christopher “Chris” Peetz as an independent Class III director, with a term running to the 2029 annual meeting. The move, announce...
Executive/Board ChangesShareholder Meetings
Arcutis Stockholders Approve Proposals at 2026 Meeting
Positive
Jun 9, 2026
On June 5, 2026, Arcutis Biotherapeutics, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders approved all three proposals on the agenda, including the election of three Class III directors to serve until the 2029 annual meeting ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.