Arcutis Biotherapeutics (ARQT) AI Stock Analysis

• Market Cap: $3.30B
• Dividend Yield: N/A
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.80
• Revenue Growth: 129.21%
• EPS Growth: 80.35%
• Country: US
• Employees: 342
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.13
• Shares Outstanding: 122,492,195
• 10 Day Avg. Volume: 1,065,476
• 30 Day Avg. Volume: 1,167,996
• PEG Ratio: 2.58
• Price to Book (P/B): 19.50
• Price to Sales (P/S): 9.82
• P/FCF Ratio: -585.47
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 8.97
• Enterprise Value/Gross Profit: 9.95
• Enterprise Value/Ebitda: -3.04K
• 1Y Price Target: $34.13
• Price Target Upside: 26.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 0.48
• Revenue Forecast (FY): $471.03M

• Rating: 64 Neutral
• Price Target: $29.00 ▲(7.37% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

Overall score is driven primarily by improving fundamentals (rapid revenue scaling, high gross margins, and a much stronger balance sheet) and a constructive earnings-call outlook (strong sales momentum and accelerated cash-flow breakeven timeline). The score is held back by still-negative cash flow, lack of consistently positive profitability, and weak valuation signals from the negative P/E; technical indicators are broadly neutral.

Positive Factors

Rapid revenue scaling

Sustained top-line expansion reflects successful commercial adoption of ZORYVE and improves operating leverage. Higher recurring product revenues give management flexibility to fund marketing, R&D and commercialization, reducing reliance on external financing as the business scales over multiple quarters.

Very high gross margins

Consistently ~90% gross margins indicate attractive unit economics for topical formulations. High product-level profitability creates a wide margin buffer to cover SG&A and R&D and supports durable profitability once fixed costs are absorbed at higher volumes.

Stronger balance sheet and cash resources

Material deleveraging and a larger equity base improve financial resilience and lower refinancing risk. With a solid capital cushion, the company can invest in additional indications and commercialization even if near-term cash generation remains variable, supporting multi-quarter strategic plans.

Negative Factors

Negative operating and free cash flow

Continued negative cash generation means the business has not yet fully self-funded operations. If revenue growth slows or gross-to-net pressures persist, the firm may need to draw on cash reserves or external capital, which can constrain long-term investment and strategic optionality.

Concentration on a single commercial franchise

Revenue dependence on ZORYVE and topical franchises concentrates commercial risk: label setbacks, competitive entries, or payer restrictions could materially affect sales. Diversification into new indications is underway but remains early, leaving near-term revenues concentrated.

Structural adoption headwinds vs topical steroids

A large incumbent preference for topical steroids creates a durable switching barrier. Overcoming entrenched prescribing habits requires sustained clinical evidence, education, and marketing investment, which can slow penetration and pressure margin expansion over multiple quarters.

Arcutis Biotherapeutics Business Overview & Revenue Model

Company Description

Arcutis 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 Money

Arcutis Biotherapeutics generates revenue primarily through the commercialization of its pharmaceutical products. The company earns money through direct sales of its approved therapies, which are marketed to healthcare providers and pharmacies. Additionally, Arcutis may engage in strategic partnerships and collaborations with larger pharmaceutical companies, which can provide upfront payments, milestone payments, and royalties on product sales. These partnerships may also involve co-development agreements, allowing Arcutis to share the costs and risks associated with bringing new therapies to market. Furthermore, the company may receive funding through grants or research agreements focused on advancing its product pipeline.

Arcutis Biotherapeutics Financial Statement Overview

Summary

Strong commercial ramp and very high gross margins (~90%) with materially improved losses (net margin improved from -71% in 2024 to about -4% in 2025) and a much healthier balance sheet (debt reduced to $6.3M; debt-to-equity ~0.03). Offsetting this, the company is still not consistently profitable and cash flow remains negative (2025 operating cash flow about -$5.6M; free cash flow about -$6.3M).

Income Statement

Revenue has scaled rapidly over time (from near-zero in 2020–2021 to $376.1M in 2025) with strong recent growth (+18.3% in 2025) and very high gross profitability (gross margin ~90% in both 2024 and 2025). The key weakness is that the company is still not consistently profitable: while losses narrowed dramatically (net margin improved from -71% in 2024 to about -4% in 2025), net income remains negative in 2025 and operating profitability is still slightly below breakeven.

Balance Sheet

Leverage has improved materially: total debt fell to $6.3M in 2025 and debt-to-equity dropped to ~0.03, down sharply from elevated levels in 2023 (~2.32). Equity has also grown to $189.5M (vs. $157.5M in 2024), supporting balance sheet resilience. The main concern is ongoing losses, reflected in negative returns on equity (still negative in 2025), which can pressure equity over time if profitability doesn’t turn sustainably positive.

Cash Flow

Cash generation remains a weak spot: operating cash flow and free cash flow were negative in 2025 (about -$5.6M and -$6.3M), and free cash flow deteriorated sharply versus 2024 (growth -83.5%). A positive is that cash burn has improved dramatically compared with 2022–2024 when operating cash flow was deeply negative, indicating better operating leverage as revenue scales; however, the business has not yet consistently self-funded operations.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	376.07M	196.54M	59.61M	3.69M	0.00
Gross Profit	339.38M	177.41M	54.62M	2.93M	-763.00K
EBITDA	-12.23M	-109.63M	-227.43M	-294.55M	-205.59M
Net Income	-16.14M	-140.04M	-262.14M	-311.46M	-206.36M
Balance Sheet
Total Assets	432.97M	348.89M	341.37M	449.27M	408.15M
Cash, Cash Equivalents and Short-Term Investments	220.98M	227.96M	271.86M	409.59M	388.60M
Total Debt	6.27M	110.58M	205.92M	202.54M	77.56M
Total Liabilities	243.49M	191.35M	252.70M	239.69M	110.47M
Stockholders Equity	189.48M	157.54M	88.67M	209.58M	297.68M
Cash Flow
Free Cash Flow	-6.31M	-112.30M	-247.49M	-281.00M	-175.62M
Operating Cash Flow	-5.63M	-112.16M	-247.06M	-257.71M	-174.63M
Investing Cash Flow	-30.25M	28.82M	180.23M	-87.20M	-75.95M
Financing Cash Flow	6.97M	66.20M	101.32M	301.80M	281.95M

Arcutis Biotherapeutics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.01
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 27.01 is above the 20-day moving average (MA) of 26.38, below the 50-day MA of 27.35, and above the 200-day MA of 20.63, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 51.77 is Neutral, neither overbought nor oversold. The STOCH value of 58.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARQT.

Arcutis Biotherapeutics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HRMY	69 Neutral	$1.62B	10.41	20.75%	―	21.13%	50.86%
ARQT	64 Neutral	$3.30B	-76.19	-28.17%	―	129.21%	80.35%
TARS	62 Neutral	$3.19B	-45.13	-23.39%	―	182.44%	47.21%
RXRX	53 Neutral	$1.84B	-2.08	-91.06%	―	-32.98%	-18.46%
IRON	52 Neutral	$2.50B	-12.48	-34.78%	―	―	-34.96%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
TVTX	47 Neutral	$2.85B	-48.66	-57.80%	―	114.22%	77.02%

Arcutis Biotherapeutics Corporate Events

Arcutis Biotherapeutics Appoints Amit Munshi as New Director

On December 3, 2025, Bhaskar Chaudhuri retired from Arcutis Biotherapeutics‘ Board of Directors, transitioning to a consulting role. Concurrently, Amit Munshi was appointed as a new director and chair of the Compensation Committee, bringing extensive biopharmaceutical leadership experience to support Arcutis’ growth and commercialization efforts.

The most recent analyst rating on (ARQT) stock is a Buy with a $37.00 price target. To see the full list of analyst forecasts on Arcutis Biotherapeutics stock, see the ARQT Stock Forecast page.