Arcutis Biotherapeutics (ARQT) AI Stock Analysis

• Market Cap: $1.90B
• Dividend Yield: N/A
• Average Volume (3M): 1.64M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.29
• Revenue Growth: 99.50%
• EPS Growth: 65.91%
• Country: US
• Employees: 342
• Sector: Healthcare
• Sector Strength: 46
• Industry: Biotechnology
• EPS (TTM): -0.13
• Shares Outstanding: 119,905,075
• 10 Day Avg. Volume: 1,621,210
• 30 Day Avg. Volume: 1,642,088
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 6.45
• Enterprise Value/Gross Profit: 7.24
• Enterprise Value/Ebitda: -24.80
• 1Y Price Target: $22.16
• Price Target Upside: 42.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 58 Neutral
• Price Target: $17.50 ▲(12.76% Upside)

Arcutis Biotherapeutics' strong revenue growth and positive earnings call sentiment are significant strengths, contributing to a promising outlook. However, profitability challenges and valuation concerns moderate the overall score. Technical indicators support a bullish trend, but caution is advised due to approaching overbought conditions.

Positive Factors

Insurance Coverage

The entire Zoryve portfolio is covered by the three national PBMs, and management reported that over 80% of prescriptions are covered by insurance.

M&A Potential

The success of the Zoryve commercialization and label expansion opportunities represent an increasingly attractive M&A target for larger derm players.

Sales Performance

Total product sales beat consensus, with management reporting 19% prescription growth, and GTN remains stable in the 50% range.

Negative Factors

Medicare Reimbursement

Medicare reimbursement has stalled due to IRA-related changes, though Medicare accounts for less than 25% of the company’s TAM.

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 Business Overview & Revenue Model

Company Description

Arcutis 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 Money

Arcutis 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 Financial Statement Overview

Summary

Arcutis Biotherapeutics shows strong revenue growth, but persistent net losses and negative cash flows highlight ongoing operational challenges. The balance sheet shows reasonable leverage, but declining equity indicates potential financial stress if profitability does not improve.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	263.46M	196.54M	59.61M	3.69M	0.00	0.00
Gross Profit	234.74M	177.41M	54.62M	2.93M	-763.00K	-455.00K
EBITDA	-68.53M	-109.63M	-227.43M	-294.55M	-205.59M	-135.22M
Net Income	-93.27M	-140.04M	-262.14M	-311.46M	-206.36M	-135.68M
Balance Sheet
Total Assets	352.43M	348.89M	341.37M	449.27M	408.15M	298.27M
Cash, Cash Equivalents and Short-Term Investments	191.13M	227.96M	271.86M	409.59M	387.06M	284.44M
Total Debt	110.16M	110.58M	205.92M	202.54M	77.56M	4.96M
Total Liabilities	213.46M	191.35M	252.70M	239.69M	110.47M	27.65M
Stockholders Equity	138.97M	157.54M	88.67M	209.58M	297.68M	270.62M
Cash Flow
Free Cash Flow	-71.32M	-112.30M	-247.49M	-281.00M	-175.62M	-113.35M
Operating Cash Flow	-65.49M	-112.16M	-247.06M	-257.71M	-174.63M	-113.03M
Investing Cash Flow	148.83M	28.82M	180.23M	-87.20M	-75.95M	-181.82M
Financing Cash Flow	-95.24M	66.20M	101.32M	301.80M	281.95M	298.14M

Arcutis Biotherapeutics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 15.52 is above the 20-day moving average (MA) of 15.49, above the 50-day MA of 14.92, and above the 200-day MA of 13.96, indicating a bullish trend. The MACD of 0.25 indicates Positive momentum. The RSI at 51.69 is Neutral, neither overbought nor oversold. The STOCH value of 18.14 is Positive, 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	81 Outperform	$2.12B	11.89	27.58%	―	17.74%	59.96%
NAMS	65 Neutral	$2.70B	―	-28.43%	―	―	―
IMCR	62 Neutral	$1.62B	―	-5.38%	―	26.90%	62.72%
ARQT	58 Neutral	$1.90B	―	-57.33%	―	99.50%	65.91%
Sector *	51 Neutral	$7.85B	-0.18	-40.01%	2.28%	22.97%	-2.05%
RXRX	50 Neutral	$2.11B	―	-86.34%	―	30.14%	-10.08%
DNLI	45 Neutral	$2.29B	―	-39.69%	―	-100.00%	1.62%

Arcutis Biotherapeutics Corporate Events

Arcutis Biotherapeutics Approves Key Proposals at Annual Meeting

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.