Results: Arcutis Biotherapeutics, Inc. Confounded Analyst Expectations With A Surprise Profit

Shareholders will be ecstatic, with their stake up 24% over the past week following Arcutis Biotherapeutics, Inc.'s (NASDAQ:ARQT) latest third-quarter results. It was a solid earnings report, with revenues and earnings both coming in very strong. Revenues were 14% higher than the analysts had forecast, at US$99m, while the company also delivered a surprise statutory profit, against analyst expectations of a loss. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Arcutis Biotherapeutics from eight analysts is for revenues of US$466.6m in 2026. If met, it would imply a substantial 47% increase on its revenue over the past 12 months. Arcutis Biotherapeutics is also expected to turn profitable, with statutory earnings of US$0.16 per share. In the lead-up to this report, the analysts had been modelling revenues of US$438.8m and earnings per share (EPS) of US$0.18 in 2026. So it's pretty clear the analysts have mixed opinions on Arcutis Biotherapeutics after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.

See our latest analysis for Arcutis Biotherapeutics

The analysts also upgraded Arcutis Biotherapeutics' price target 26% to US$29.38, implying that the higher revenue expected to generate enough value to offset the forecast decline in earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Arcutis Biotherapeutics, with the most bullish analyst valuing it at US$34.00 and the most bearish at US$22.00 per share. 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.

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 pretty clear that there is an expectation that Arcutis Biotherapeutics' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 36% growth on an annualised basis. This is compared to a historical growth rate of 79% 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 21% annually. 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 to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Arcutis Biotherapeutics going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Arcutis Biotherapeutics that you should be aware of.

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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.