Earnings Beat: Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts
Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) investors will be delighted, with the company turning in some strong numbers with its latest results. Arcutis Biotherapeutics beat expectations with revenues of US$60m arriving 3.7% ahead of forecasts. The company also reported a statutory loss of US$3.78, 4.1% smaller than was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Arcutis Biotherapeutics
Following the latest results, Arcutis Biotherapeutics' six analysts are now forecasting revenues of US$106.3m in 2024. This would be a major 78% improvement in revenue compared to the last 12 months. Losses are expected to hold steady at around US$2.35. Before this latest report, the consensus had been expecting revenues of US$85.7m and US$2.38 per share in losses. So there's definitely been a change in sentiment in this update, with the analysts upgrading this year's revenue estimates, while at the same time holding losses per share steady.
The consensus price target rose 50% to US$18.00, with the analysts encouraged by the improved revenue outlook even though the company remains lossmaking. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Arcutis Biotherapeutics analyst has a price target of US$26.00 per share, while the most pessimistic values it at US$11.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Arcutis Biotherapeutics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 78% growth on an annualised basis. This is compared to a historical growth rate of 100% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. Even after the forecast slowdown in growth, it seems obvious that Arcutis Biotherapeutics is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Arcutis Biotherapeutics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Arcutis Biotherapeutics going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for Arcutis Biotherapeutics you should be aware of, and 1 of them is potentially serious.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
