Growth Investors: Industry Analysts Just Upgraded Their Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Revenue Forecasts By 21%

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 analysts have sharply increased their revenue numbers, with a view that Arcutis Biotherapeutics will make substantially more sales than they'd previously expected.

Following the upgrade, the most recent consensus for Arcutis Biotherapeutics from its seven analysts is for revenues of US$44m in 2023 which, if met, would be a substantial 294% increase on its sales over the past 12 months. Losses are supposed to balloon 29% to US$4.53 per share. However, before this estimates update, the consensus had been expecting revenues of US$37m and US$4.71 per share in losses. 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.

Check out our latest analysis for Arcutis Biotherapeutics

The consensus price target fell 14%, to US$35.57, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Arcutis Biotherapeutics' growth to accelerate, with the forecast 15x annualised growth to the end of 2023 ranking favourably alongside historical growth of 151% per annum 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. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. 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.

Analysts are definitely bullish on Arcutis Biotherapeutics, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including major dilution from new stock issuance in the past year. You can learn more, and discover the 3 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.

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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.