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Arcutis Biotherapeutics (ARQT)
NASDAQ:ARQT
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Arcutis Biotherapeutics (ARQT) AI Stock Analysis

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ARQT

Arcutis Biotherapeutics

(NASDAQ:ARQT)

Rating:52Neutral
Price Target:
$15.00
▲(1.56% Upside)
Arcutis Biotherapeutics demonstrates strong revenue growth and positive momentum from recent FDA approvals, which are significant strengths. However, persistent unprofitability, negative cash flows, and valuation concerns weigh heavily on the overall score. The technical analysis provides a neutral outlook, while the earnings call offers a positive sentiment despite some challenges.
Positive Factors
Market Position
Zoryve is currently the leader in the branded anti-inflammatory topical class and has the potential to treat ~17MM patients across indications.
Product Demand
Strong demand across products delivered solid Q2 and signal steady future growth.
Sales Performance
ARQT had a banner 2Q25 with a top-line (total Zoryve sales) of $81.5MM that handily surpassed the Street's $73.7MM.
Negative Factors
Market Competition
Commercial success is not assured since dermatology remains a highly competitive segment of the market.
Market Dynamics
The market for topical agents like Zoryve could be negatively impacted by the development of targeted oral therapies.
Product Development
The company disclosed that it is discontinuing development of ARQ-255 following Phase 1b results in alopecia areata did not meet the company's threshold for advancing development.

Arcutis Biotherapeutics (ARQT) vs. SPDR S&P 500 ETF (SPY)

Arcutis Biotherapeutics Business Overview & Revenue Model

Company DescriptionArcutis Biotherapeutics, Inc. (ARQT) is a biopharmaceutical company dedicated to developing and commercializing innovative dermatological therapies. The company focuses on creating treatments for immune-mediated dermatological diseases and conditions. Arcutis's core products include topical creams and ointments designed to address conditions such as psoriasis and eczema, aiming to improve patient outcomes through advanced drug formulations.
How the Company Makes MoneyArcutis Biotherapeutics generates revenue primarily through the sale of its dermatological products. The company's revenue model is centered around the commercialization of its proprietary topical treatments. Key revenue streams include sales from both prescription products and potential collaborations with other pharmaceutical companies. Significant factors contributing to its earnings are the successful development and market penetration of its products, ongoing clinical trials that expand its product line, and strategic partnerships that enhance distribution and market reach.

Arcutis Biotherapeutics Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: -3.84%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant revenue growth and FDA approvals for ZORYVE, demonstrating strong commercial execution and promising pipeline developments. However, challenges such as the halted ARQ-255 program and difficulties in securing Medicare Part D coverage tempered the overall outlook.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth for ZORYVE
In Q2 2025, Arcutis reported net product revenues of $81.5 million, representing a 28% quarter-on-quarter growth and a 164% increase compared to Q2 2024.
FDA Approval for ZORYVE Foam
Received FDA approval for ZORYVE foam 0.3% for the treatment of plaque psoriasis of the scalp and body, marking the fifth FDA approval for ZORYVE in the last 3 years.
Progress in Pediatric Atopic Dermatitis
Submitted sNDA for ZORYVE cream 0.05% for children aged 2 to 5 with atopic dermatitis, with a target PDUFA date in October 2025.
Strong Prescription Volume Growth
ZORYVE prescription volume reached a record high of 16,000 weekly scripts on a rolling 4-week average basis, with a 117% year-over-year volume increase.
Positive Operating Leverage
The company demonstrated improved operating leverage, reducing cash burn and achieving slight cash flow positivity from operating activities in the quarter.
Negative Updates
Halted ARQ-255 Development
Decision to halt further development of ARQ-255 following Phase Ib trial results that did not justify continuation.
Challenges with Medicare Part D
Continued challenges in securing Medicare Part D coverage due to financial disruptions from the Inflation Reduction Act.
Seasonality Impact
Anticipated moderation in sequential growth rate in Q3 due to typical market seasonality.
Company Guidance
In the second quarter of 2025, Arcutis Biotherapeutics reported strong financial performance, driven by the robust growth of its ZORYVE franchise. Net product revenues reached $81.5 million, reflecting a 28% quarter-on-quarter increase and a 164% growth compared to the same quarter in 2024. This growth was supported by the FDA approval of ZORYVE foam 0.3% for treating plaque psoriasis of the scalp and body, marking the fifth FDA approval for ZORYVE in three years. The company saw a record high of 16,000 weekly prescriptions on a rolling 4-week average basis, with total prescriptions for the quarter reaching nearly 200,000, a 117% year-over-year increase. Arcutis also improved its operating leverage, helping reduce cash burn and moving towards cash flow breakeven by 2026. The company continues to focus on expanding ZORYVE's indications and maintaining disciplined capital allocation to fuel its growth strategy.

Arcutis Biotherapeutics Financial Statement Overview

Summary
Arcutis Biotherapeutics shows strong revenue growth but remains unprofitable with negative cash flows, posing liquidity risks. The balance sheet displays moderate leverage, but declining equity indicates potential financial stress.
Income Statement
35
Negative
Arcutis Biotherapeutics shows a significant improvement in total revenue, growing from $3.7 million in 2022 to $212.8 million in TTM 2025. However, the company remains unprofitable with a net loss of $129.7 million in TTM 2025, resulting in negative net profit margins. The gross profit margin is strong at 88.4% for TTM 2025, indicating efficient cost management, but operating losses continue to weigh heavily on the overall financial health.
Balance Sheet
45
Neutral
The company has a moderate debt-to-equity ratio of 0.78 in TTM 2025, showing a balanced approach to leveraging its equity. However, stockholders' equity has decreased over the years, reflecting ongoing net losses. The equity ratio stands at 41.5%, suggesting a reasonable proportion of equity in the asset base, but the declining trend in equity is a concern.
Cash Flow
30
Negative
Arcutis Biotherapeutics exhibits negative operating cash flow of $110.9 million in TTM 2025, which remains a challenge alongside a negative free cash flow of $116.7 million. The cash flow to net income ratios indicate that cash flow generation is not yet aligned with net income improvements, posing liquidity risks if trends persist.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue196.54M59.61M3.69M0.000.00
Gross Profit177.41M54.62M2.93M-763.00K-455.00K
EBITDA-109.63M-227.43M-294.55M-205.59M-135.22M
Net Income-140.04M-262.14M-311.46M-206.36M-135.68M
Balance Sheet
Total Assets348.89M341.37M449.27M408.15M298.27M
Cash, Cash Equivalents and Short-Term Investments227.96M271.86M409.59M387.06M284.44M
Total Debt110.58M205.92M202.54M77.56M4.96M
Total Liabilities191.35M252.70M239.69M110.47M27.65M
Stockholders Equity157.54M88.67M209.58M297.68M270.62M
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 Flow28.82M180.23M-87.20M-75.95M-181.82M
Financing Cash Flow66.20M101.32M301.80M281.95M298.14M

Arcutis Biotherapeutics Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14.77
Price Trends
50DMA
14.28
Positive
100DMA
14.45
Positive
200DMA
13.45
Positive
Market Momentum
MACD
0.09
Positive
RSI
51.21
Neutral
STOCH
45.24
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 14.77 is below the 20-day moving average (MA) of 14.90, above the 50-day MA of 14.28, and above the 200-day MA of 13.45, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 51.21 is Neutral, neither overbought nor oversold. The STOCH value of 45.24 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 (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$1.97B11.0227.58%17.74%59.96%
64
Neutral
$2.85B-28.43%
60
Neutral
HK$17.63B4.46-4.95%3.59%9.78%-39.36%
52
Neutral
$1.77B-57.33%99.50%65.91%
51
Neutral
$1.61B-5.38%25.50%64.63%
49
Neutral
$2.33B-86.34%30.14%-10.08%
45
Neutral
$2.03B-35.21%-100.00%-144.79%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ARQT
Arcutis Biotherapeutics
14.77
5.28
55.64%
DNLI
Denali Therapeutics
13.96
-8.56
-38.01%
HRMY
Harmony Biosciences Holdings
34.19
0.78
2.33%
IMCR
Immunocore Holdings
31.97
-5.66
-15.04%
NAMS
NewAmsterdam Pharma Company
25.31
8.27
48.53%
RXRX
Recursion Pharmaceuticals
5.36
-0.67
-11.11%

Arcutis Biotherapeutics Corporate Events

Executive/Board ChangesShareholder Meetings
Arcutis Biotherapeutics Approves Key Proposals at Annual Meeting
Neutral
Jun 17, 2025

On June 12, 2025, Arcutis Biotherapeutics held its 2025 Annual Meeting of Stockholders, where all proposed matters were approved by the shareholders. The meeting included the election of three Class II directors, ratification of Ernst & Young LLP as the independent auditor, and approval of executive compensation. Additionally, the company revised its Non-Employee Director Compensation Plan to enhance its corporate governance practices and attract qualified board members.

The most recent analyst rating on (ARQT) stock is a Buy with a $29.00 price target. To see the full list of analyst forecasts on Arcutis Biotherapeutics stock, see the ARQT Stock Forecast page.

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.Date of analysis: Aug 09, 2025