Earnings Update: Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Just Reported Its First-Quarter Results And Analysts Are Updating Their Forecasts

Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It looks like a positive result overall, with revenues of US$66m beating forecasts by 5.4%. Statutory losses of US$0.20 per share were 5.4% smaller than the analysts expected, likely helped along by the higher revenues. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Arcutis Biotherapeutics after the latest results.

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Taking into account the latest results, the most recent consensus for Arcutis Biotherapeutics from seven analysts is for revenues of US$308.2m in 2025. If met, it would imply a major 45% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 49% to US$0.56. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$305.1m and losses of US$0.55 per share in 2025.

See our latest analysis for Arcutis Biotherapeutics

As a result there was no major change to the consensus price target of US$21.14, implying that the business is trading roughly in line with expectations despite ongoing losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Arcutis Biotherapeutics analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$19.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 2025 expected to display 64% growth on an annualised basis. This is compared to a historical growth rate of 85% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% annually. 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$21.14, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Arcutis Biotherapeutics going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Arcutis Biotherapeutics that you need to take into consideration.

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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.