Arcus Biosciences (RCUS) AI Stock Analysis

• Market Cap: $1.15B
• Dividend Yield: N/A
• Average Volume (3M): 761.32K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.02
• Revenue Growth: 6.07%
• EPS Growth: -2.28%
• Country: US
• Employees: 627
• Sector: Healthcare
• Sector Strength: 49
• Industry: Biotechnology
• EPS (TTM): 0.00
• Shares Outstanding: 106,430,980
• 10 Day Avg. Volume: 642,114
• 30 Day Avg. Volume: 761,321
• 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: 0.06
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 0.25
• Enterprise Value/Ebitda: -0.23
• 1Y Price Target: $30.70
• Price Target Upside: 165.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 54 Neutral
• Price Target: $12.00 ▲(3.81% Upside)

Arcus Biosciences' stock score is primarily influenced by its strong technical momentum, despite financial challenges and a weak valuation. The company's robust revenue growth is a positive, but profitability and cash flow issues need to be addressed for long-term stability. The technical analysis suggests potential for short-term gains, but caution is advised due to overbought conditions.

Positive Factors

Clinical Progress

The PEAK-1 trial has initiated enrollment and will evaluate casdatifan and cabozantinib in patients with advanced or metastatic clear cell renal cell carcinoma, indicating progress in research and development.

Financial Position

Arcus Biosciences ended the quarter with significant cash and investments, expected to fund operations through key initial readouts, providing a strong financial position.

Product Differentiation

New analysis supports the clinical relevance of erythropoietin suppression by casdatifan, which differentiates it from competitors, bolstering confidence in its potential.

Negative Factors

Commercial Challenges

Skepticism has weighed on sentiment due to Gilead's commercial opt-out and overall uncertainty.

Competitive Pressures

Difficulties competing with established players like Merck and Bristol and the considerable cost of running necessary studies pose challenges.

Market Skepticism

Arcus faces challenges in achieving its vision due to prescriber inertia and strong skepticism towards its PD-1 zimberelimab.

Arcus Biosciences Business Overview & Revenue Model

Company Description

Arcus Biosciences, Inc., a clinical-stage biopharmaceutical company, develops and commercializes cancer therapies in the United States. Its product pipeline includes, Etrumadenant, a dual A2a/A2b adenosine receptor antagonist, which is in a Phase 1b/2 clinical trial; and Zimberelimab, an anti-PD-1 antibody that is in Phase 1b clinical trial for monotherapy. The company also develops Domvanalimab, an anti-TIGIT monoclonal antibody, which is in Phase 2 development for the treatment of first-line metastatic non-small cell lung cancer in combination with Zimberelimab; Quemliclustat, a small-molecule CD73 inhibitor is in a Phase 1/1b study for the treatment of first-line metastatic pancreatic cancer; and AB521, an oral and small molecule HIF-2a inhibitor that is in Phase 1 study for the treatment of patients with von Hippel- Lindau disease. It has a clinical development collaboration agreement with Strata Oncology, Inc. to evaluate Zimberelimab; a collaboration with AstraZeneca, BVF Partners L.P to evaluate domvanalimab, its investigational anti-TIGIT antibody, in combination with Imfinzi (durvalumab) in a registrational Phase 3 clinical trial in patients with unresectable Stage III non-small cell lung cancer; and license agreements with Taiho Pharmaceutical Co., Ltd, Abmuno Therapeutics LLC, and WuXi Biologics to develop anti-CD39 antibody for the treatment of cancer. The company was incorporated in 2015 and is headquartered in Hayward, California.

How the Company Makes Money

Arcus Biosciences generates revenue primarily through the development and commercialization of its pharmaceutical products. The company's revenue model includes potential milestone payments from collaborations with larger pharmaceutical companies, royalties from product sales once therapies are approved, and funding from strategic partnerships. Significant partnerships with established biopharma entities can enhance its financial stability and provide upfront payments, research funding, and shared development costs. Additionally, as the company advances its drug candidates through clinical trials, it may realize milestone payments tied to achieving specific development stages, thus contributing to its overall earnings.

Arcus Biosciences Financial Statement Overview

Summary

Arcus Biosciences is experiencing robust revenue growth, but profitability and cash flow challenges persist. The company maintains a low leverage position, which is positive, but needs to address its operational inefficiencies to improve financial health.

Income Statement

Arcus Biosciences has shown significant revenue growth in the TTM period with an 85.82% increase, indicating strong top-line expansion. However, the company is struggling with profitability, as evidenced by negative net profit margins and EBIT margins across all periods, reflecting ongoing operational challenges.

Balance Sheet

The company's debt-to-equity ratio is relatively low at 0.20 in the TTM period, suggesting a conservative leverage position. However, the negative return on equity indicates that the company is not currently generating positive returns for shareholders, which is a concern for long-term sustainability.

Cash Flow

Arcus Biosciences has experienced positive free cash flow growth in the TTM period, but the operating cash flow remains negative, which could impact liquidity. The free cash flow to net income ratio is slightly above 1, indicating that cash flows are aligned with reported earnings, but the negative operating cash flow to net income ratio suggests operational inefficiencies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	262.00M	258.00M	117.00M	112.00M	383.00M	78.00M
Gross Profit	262.00M	258.00M	117.00M	112.00M	383.00M	78.00M
EBITDA	-282.00M	-269.00M	-291.00M	-258.00M	59.00M	-120.00M
Net Income	-306.00M	-283.00M	-307.00M	-267.00M	53.00M	-123.00M
Balance Sheet
Total Assets	1.07B	1.15B	1.09B	1.34B	1.59B	772.29M
Cash, Cash Equivalents and Short-Term Investments	911.00M	978.00M	759.00M	1.14B	681.30M	735.09M
Total Debt	109.00M	60.00M	11.00M	120.00M	116.89M	15.24M
Total Liabilities	526.00M	665.00M	633.00M	688.00M	750.45M	269.99M
Stockholders Equity	549.00M	485.00M	462.00M	657.00M	841.45M	502.30M
Cash Flow
Free Cash Flow	-342.00M	-176.00M	-330.00M	426.00M	-282.25M	108.11M
Operating Cash Flow	-339.00M	-170.00M	-306.00M	438.00M	-256.17M	111.17M
Investing Cash Flow	191.00M	-84.00M	194.00M	-413.00M	-3.87M	-434.37M
Financing Cash Flow	240.00M	277.00M	33.00M	33.00M	237.34M	438.68M

Arcus Biosciences Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCUS, the sentiment is Positive. The current price of 11.56 is above the 20-day moving average (MA) of 10.27, above the 50-day MA of 9.58, and above the 200-day MA of 10.89, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 70.53 is Negative, neither overbought nor oversold. The STOCH value of 83.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCUS.

Arcus Biosciences Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVXL	62 Neutral	$814.27M	―	-43.63%	―	―	-13.05%
RCUS	54 Neutral	$1.15B	―	-50.34%	―	6.07%	-2.28%
VERV	52 Neutral		―		―	271.44%	26.65%
Sector *	51 Neutral	$7.91B	-0.36	-41.70%	2.23%	23.45%	-1.86%
SYRE	43 Neutral	$1.00B	2.31	-41.00%	―	―	-429.68%
REPL	42 Neutral	$460.53M	―	-73.44%	―	―	-1.07%
SANA	33 Underperform	$734.71M	―	-109.12%	―	―	7.58%

Arcus Biosciences Corporate Events

Arcus Biosciences Holds Annual Stockholders Meeting

On June 10, 2025, Arcus Biosciences held its annual meeting of stockholders, where key proposals were voted on, including the election of Class I directors and the ratification of Ernst & Young LLP as the independent auditor for the fiscal year ending December 31, 2025. Additionally, the Board of Directors revised the Non-Employee Director Compensation Program, reflecting the company’s ongoing efforts to align its governance and compensation practices with industry standards.