Arrowhead Pharmaceuticals (ARWR) AI Stock Analysis

• Market Cap: $8.86B
• Dividend Yield: N/A
• Average Volume (3M): 2.87M
• Price to Earnings (P/E): 41.1
• Beta (1Y): 2.47
• Revenue Growth: 23258.15%
• EPS Growth: 99.12%
• Country: US
• Employees: 609
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.22
• Shares Outstanding: 140,032,200
• 10 Day Avg. Volume: 1,872,756
• 30 Day Avg. Volume: 2,869,590
• PEG Ratio: 28.35
• Price to Book (P/B): 9.90
• Price to Sales (P/S): 5.56
• P/FCF Ratio: 29.41
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 8.22
• Enterprise Value/Gross Profit: 8.27
• Enterprise Value/Ebitda: 24.23
• 1Y Price Target: $82.00
• Price Target Upside: 29.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): -3.21
• Revenue Forecast (FY): $454.26M

• Rating: 69 Neutral
• Price Target: $71.00 ▲(12.22% Upside)
• Action: Reiterated Date: 02/07/26
• Date: Action: Reiterated 02/07/26

The score is led by improved financial performance (profitability and strong TTM cash generation) and a constructive earnings update (approval/launch progress and strengthened funding runway). Offsetting factors are valuation (high P/E with no dividend support) and a mixed technical picture with near-term weakness versus key short-term moving averages.

Positive Factors

Cash Generation

Sustained TTM operating cash flow (~$339M) and FCF (~$322M) materially improve Arrowhead's ability to fund registrational trials and early commercialization without immediate reliance on dilutive equity, increasing operational flexibility over the next 2–6 months.

Balance Sheet Strengthening

A $1.33B funding package (upfronts, milestone and convertibles) plus $917M cash provides a durable runway to execute multiple late‑stage readouts and early commercial activities, reducing near‑term financing pressure and supporting strategic optionality.

Commercial Approval & Efficacy Validation

First FDA approval and robust Phase III efficacy validate Arrowhead's TRiM RNAi platform, enabling a transition to commercial-stage operations, diversifying revenue sources beyond collaborations and strengthening the company's credibility with payers and partners.

Negative Factors

Elevated Leverage

Debt remaining above equity (debt/equity ~1.21 TTM) leaves Arrowhead sensitive to cash‑flow volatility; elevated leverage constrains strategic flexibility and increases refinancing or covenant risk if clinical or commercial momentum weakens.

Revenue Concentration on Collaborations

Recent profitability and revenue were materially driven by discrete collaboration and milestone receipts, making near‑term results dependent on partner timing and non‑recurring items rather than repeatable product sales, increasing earnings volatility.

Clinical & Reporting Uncertainties

Key registrational SHASTA studies remain blinded and have observed adjudicated pancreatitis events; combined with early-stage obesity/CNS programs and limited product‑level margin reporting, this amplifies regulatory, safety and profitability uncertainty over the medium term.

Arrowhead Pharmaceuticals Business Overview & Revenue Model

Company Description

Arrowhead Pharmaceuticals, Inc. develops medicines for the treatment of intractable diseases in the United States. The company's products in pipeline includes ARO-AAT, a RNA interference (RNAi) therapeutic candidate that is in Phase II clinical trial for the treatment of liver diseases associated with alpha-1 antitrypsin deficiency; ARO-APOC3, which is in phase 2b and one phase 3 clinical trial to treat hypertriglyceridemia; ARO-ANG3 that is in Phase 2b clinical trial to reduce production of angiopoietin-like protein 3; ARO-HSD, which is in Phase 1/2a clinical trial to treat liver diseases; ARO-ENaC, which is in a Phase 1/2a clinical trial to reduce production of the epithelial sodium channel alpha subunit in the airways of the lung; ARO-C3 for the treatment of complement-mediated disease that is in Phase 1/2a clinical trial; ARO-Lung2 for the treatment of chronic obstructive pulmonary disorder; ARO-DUX4 for the treatment of facioscapulohumeral muscular dystrophy; ARO-XDH to treat uncontrolled gout; ARO-COV for the treatment of COVID-19 and other pulmonary-borne pathogens; and ARO-HIF2, which is in phase 1b clinical trial to treat clear cell renal cell carcinoma. It is also involved in the development of JNJ-3989, a subcutaneously administered RNAi therapeutic candidate to treat chronic hepatitis B virus infection; Olpasiran to reduce the production of apolipoprotein A; and ARO-AMG1 for treating genetically validated cardiovascular targets. Arrowhead Pharmaceuticals, Inc. has a license and research collaboration agreement with Janssen Pharmaceuticals, Inc. to develop ARO-JNJ1, ARO-JNJ2, and ARO-JNJ3 RNAi therapeutics for liver-expressed targets; and license and research collaboration agreement with Takeda Pharmaceuticals U.S.A., Inc. to develop RNAi therapeutic candidate as a treatment for liver disease. Arrowhead Pharmaceuticals, Inc. was incorporated in 1989 and is headquartered in Pasadena, California.

How the Company Makes Money

Arrowhead Pharmaceuticals generates revenue primarily through a combination of collaboration agreements, licensing deals, and potential milestone payments from its partnerships with larger pharmaceutical companies. The company may earn upfront payments when entering into collaborations, as well as milestone payments tied to the achievement of specific clinical or regulatory milestones. Additionally, if its product candidates receive regulatory approval and are commercialized, Arrowhead could earn royalties on sales. Strategic partnerships with established pharmaceutical companies, which provide funding and expertise in drug development and commercialization, are significant contributors to Arrowhead's financial success and ongoing research initiatives.

Arrowhead Pharmaceuticals Financial Statement Overview

Summary

Strong TTM turnaround with meaningful profitability and robust operating/free cash flow, but results have been historically volatile and leverage remains elevated (debt still exceeds equity), making sustainability the key risk.

Income Statement

ARWR shows a sharp profitability inflection in TTM (Trailing-Twelve-Months), with revenue up ~31.5% and strong operating profitability (EBIT margin ~30.7%, net margin ~18.5%). This is a major improvement versus the large losses seen in FY2024 and sustained losses in FY2022–FY2023. The main offset is volatility: FY2025 annual revenue surged (~232.6%) but profitability was roughly breakeven (slightly negative net income), highlighting that results can swing meaningfully period to period.

Balance Sheet

Leverage is meaningful for a biotech profile. While debt-to-equity improved to ~1.21 in TTM (Trailing-Twelve-Months) from ~1.80 in FY2025 and a stressed ~4.59 in FY2024, debt still exceeds equity and remains a key risk if earnings/cash flow soften. Equity has recovered from FY2024 levels, and TTM return on equity is strong (~36%), but prior years’ negative returns underscore that balance-sheet strength is closely tied to the durability of the recent profit ramp.

Cash Flow

Cash generation is a clear positive in the most recent periods. TTM (Trailing-Twelve-Months) operating cash flow (~$339M) and free cash flow (~$322M) are solid, with very strong free-cash-flow growth (~105%). Cash conversion is reasonably aligned with earnings (free cash flow at ~95% of net income). The key weakness is historical instability—FY2022–FY2024 showed large cash burn and negative free cash flow—so sustainability of the current run-rate remains the central watch item.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	1.09B	829.45M	3.55M	240.74M	243.23M	138.29M
Gross Profit	1.08B	805.52M	3.55M	240.74M	243.23M	138.29M
EBITDA	370.22M	164.82M	-561.51M	-175.67M	-162.29M	-132.58M
Net Income	202.26M	-1.63M	-599.49M	-205.28M	-176.06M	-140.85M
Balance Sheet
Total Assets	1.60B	1.39B	1.14B	765.55M	691.94M	710.15M
Cash, Cash Equivalents and Short-Term Investments	916.61M	919.37M	680.96M	403.63M	376.40M	367.79M
Total Debt	312.77M	366.28M	851.91M	383.50M	81.58M	25.55M
Total Liabilities	1.04B	881.88M	948.74M	478.39M	273.60M	301.33M
Stockholders Equity	568.42M	466.05M	185.44M	271.34M	398.52M	408.82M
Cash Flow
Free Cash Flow	322.01M	156.89M	-604.32M	-330.63M	-188.91M	147.75M
Operating Cash Flow	339.31M	179.55M	-462.85M	-153.89M	-136.13M	171.31M
Investing Cash Flow	-229.95M	-129.29M	-420.07M	-96.16M	-5.42M	-141.68M
Financing Cash Flow	38.62M	74.01M	870.52M	253.05M	65.19M	11.30M

Arrowhead Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 63.27
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARWR, the sentiment is Positive. The current price of 63.27 is below the 20-day moving average (MA) of 65.07, below the 50-day MA of 66.21, and above the 200-day MA of 37.89, indicating a neutral trend. The MACD of -0.81 indicates Positive momentum. The RSI at 46.81 is Neutral, neither overbought nor oversold. The STOCH value of 44.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARWR.

Arrowhead Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRYS	81 Outperform	$8.06B	40.27	18.91%	―	54.51%	275.94%
ACAD	75 Outperform	$4.19B	10.73	39.89%	―	12.69%	100.80%
ARWR	69 Neutral	$8.86B	41.13	65.14%	―	23258.15%	99.12%
ALKS	66 Neutral	$5.02B	21.01	14.72%	―	1.08%	3.40%
ACLX	64 Neutral	$6.65B	-28.06	-47.18%	―	-76.96%	-425.41%
PCVX	56 Neutral	$8.89B	-10.82	-25.59%	―	―	-5.21%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Arrowhead Pharmaceuticals Corporate Events

Arrowhead Pharmaceuticals Issues Zero-Coupon 2032 Convertible Notes

On January 12, 2026, Arrowhead Pharmaceuticals issued $700 million aggregate principal amount of 0.00% Convertible Senior Notes due 2032, including $75 million issued pursuant to the full exercise of the underwriters’ over-allotment option. The senior unsecured notes, which do not bear regular interest and mature on January 15, 2032, are convertible into Arrowhead common shares at an initial rate equivalent to a conversion price of about $87.07 per share, subject to customary adjustments and potential increases in certain make-whole scenarios, and include detailed provisions for redemption, repurchase upon fundamental changes, and events of default that govern creditor protections and the company’s capital structure. In connection with the notes offering, Arrowhead also entered into capped call transactions on January 7 and 8, 2026 with several financial institutions, spending approximately $47.9 million to economically hedge the conversion feature and reduce potential dilution to existing shareholders, with a cap price initially set at about $119.33 per share, thereby fine-tuning the balance between raising zero-coupon convertible financing and managing equity dilution risk.

The most recent analyst rating on (ARWR) stock is a Hold with a $68.00 price target. To see the full list of analyst forecasts on Arrowhead Pharmaceuticals stock, see the ARWR Stock Forecast page.

Arrowhead Pharmaceuticals Launches Major Equity and Notes Offerings

On January 7, 2026, Arrowhead Pharmaceuticals entered into agreements for concurrent public offerings of common stock, pre-funded warrants and 0.00% convertible senior notes due 2032, marking a significant capital raise to fund its growth plans. The equity offering comprised 3,100,776 shares of common stock at $64.50 per share, or pre-funded warrants in lieu of shares for up to 1,550,387 shares at $64.499 per warrant, with underwriters exercising in full a 30-day option on January 8, 2026 to purchase an additional 456,116 shares, bringing expected net proceeds to about $216.6 million ahead of an anticipated January 9, 2026 closing. In parallel, Arrowhead priced an upsized $625 million convertible notes offering, later expanded by underwriters’ full exercise of a $75 million over-allotment option on January 8, 2026, for expected net proceeds of approximately $681.3 million, with settlement targeted for January 12, 2026; the zero-coupon notes mature in 2032, carry an initial conversion price of about $87.07 per share, may be redeemed by Arrowhead from 2029 under certain share-price conditions, and are hedged via capped call transactions designed to limit dilution. The combined financings, made under an effective shelf registration and backed by major underwriters including J.P. Morgan and Jefferies, are intended to strengthen Arrowhead’s balance sheet and fund general corporate purposes such as R&D, clinical trials, commercialization activities and possible debt prepayment, potentially enhancing its financial flexibility and competitive positioning as it advances late-stage drug programs.

The most recent analyst rating on (ARWR) stock is a Hold with a $70.00 price target. To see the full list of analyst forecasts on Arrowhead Pharmaceuticals stock, see the ARWR Stock Forecast page.

Arrowhead Reports Promising Interim Data for Obesity RNAi Trials

On January 6, 2026, Arrowhead Pharmaceuticals reported interim data from two ongoing Phase 1/2a trials of its investigational RNAi obesity candidates ARO-INHBE and ARO-ALK7, showing meaningful improvements in body composition and weight in obese participants, including those with type 2 diabetes. ARO-INHBE monotherapy produced dose-dependent reductions in serum Activin E and reduced visceral and liver fat while modestly increasing lean tissue, and in combination with tirzepatide in obese patients with type 2 diabetes, it roughly doubled weight loss (–9.4% vs. –4.8% at week 16) and tripled reductions in visceral, total, and liver fat versus tirzepatide alone. ARO-ALK7 emerged as the first RNAi drug to demonstrate adipocyte gene target silencing in humans, achieving up to 94% knockdown of ALK7 mRNA and a placebo-adjusted 14.1% visceral fat reduction after a single dose, suggesting the Activin E/ALK7 pathway could be harnessed to improve outcomes in obese patients, particularly those with diabetes who typically respond less well to incretin therapies. Both candidates were generally well tolerated, with mostly mild adverse events and no treatment-related serious safety signals to date, bolstering Arrowhead’s strategic push into obesity and broader cardiometabolic indications and reinforcing its positioning as a leading developer of RNAi-based therapies targeting both liver and adipose tissue.

The most recent analyst rating on (ARWR) stock is a Buy with a $85.00 price target. To see the full list of analyst forecasts on Arrowhead Pharmaceuticals stock, see the ARWR Stock Forecast page.

Arrowhead Pharmaceuticals’ REDEMPLO Approved by FDA

On November 18, 2025, Arrowhead Pharmaceuticals announced that the FDA approved REDEMPLO® (plozasiran) for reducing triglycerides in adults with familial chylomicronemia syndrome (FCS). This approval marks Arrowhead’s first FDA-approved medicine, utilizing their proprietary TRiMTM platform, and represents a significant milestone as the company transitions into a commercial stage. REDEMPLO is the first FDA-approved siRNA treatment for FCS, offering new hope for the estimated 6,500 U.S. patients with this rare disease. The approval is based on successful Phase 3 PALISADE study results, showing significant triglyceride reduction and lower acute pancreatitis incidence compared to placebo. Arrowhead is launching a patient support program, Rely On REDEMPLO, to assist patients throughout their treatment journey.

The most recent analyst rating on (ARWR) stock is a Hold with a $45.00 price target. To see the full list of analyst forecasts on Arrowhead Pharmaceuticals stock, see the ARWR Stock Forecast page.