Need To Know: Analysts Are Much More Bullish On Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Revenues
Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. Investor sentiment seems to be improving too, with the share price up 8.2% to US$10.41 over the past 7 days. Could this big upgrade push the stock even higher?
Following the upgrade, the current consensus from Arcutis Biotherapeutics' six analysts is for revenues of US$106m in 2024 which - if met - would reflect a sizeable 78% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 12% per share from last year to US$2.39. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$86m and losses of US$2.38 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
View our latest analysis for Arcutis Biotherapeutics
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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Arcutis Biotherapeutics' past performance and to peers in the same industry. 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. So it's pretty clear that, while Arcutis Biotherapeutics' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Arcutis Biotherapeutics is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Arcutis Biotherapeutics.
Analysts are clearly in love with Arcutis Biotherapeutics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other concerns we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
