Need To Know: Analysts Are Much More Bullish On Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Revenues

Celebrations may be in order for Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Arcutis Biotherapeutics has also found favour with investors, with the stock up a remarkable 22% to US$11.77 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After the upgrade, the six analysts covering Arcutis Biotherapeutics are now predicting revenues of US$106m in 2024. If met, this would reflect a sizeable 78% improvement in sales compared to the last 12 months. Losses are forecast to hold steady at around US$2.35 per share. However, before this estimates update, the consensus had been expecting revenues of US$86m 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.

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.

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. We would highlight that Arcutis Biotherapeutics' revenue growth is expected to slow, with the forecast 78% annualised growth rate until the end of 2024 being well below the historical 100% p.a. growth over the last 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 most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Arcutis Biotherapeutics' prospects. 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 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 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.

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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.