Analysts' Revenue Estimates For Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Are Surging Higher

Shareholders in Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the latest consensus from Arcutis Biotherapeutics' seven analysts is for revenues of US$37m in 2023, which would reflect a huge 226% improvement in sales compared to the last 12 months. Losses are presumed to reduce, shrinking 12% per share from last year to US$4.71. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$29m and losses of US$4.95 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

See our latest analysis for Arcutis Biotherapeutics

The consensus price target fell 5.8%, to US$41.57, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Arcutis Biotherapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 10x annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 151% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Arcutis Biotherapeutics to grow faster than the wider industry.

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. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Arcutis Biotherapeutics' future valuation. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Arcutis Biotherapeutics.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Arcutis Biotherapeutics analysts - going out to 2025, and you can see them free on our platform here.

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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.