Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, Jefferies maintained a Buy rating on Arcutis Biotherapeutics Inc . (NASDAQ: NASDAQ:ARQT) shares and increased the price target to $20.00, up from the previous $19.00. The adjustment follows Arcutis’ announcement of first-quarter Zoryve product revenues amounting to $63.8 million, surpassing the consensus estimate of $62.2 million. The company, currently valued at $1.71 billion, has demonstrated impressive revenue growth of 230% over the last twelve months, with a remarkable gross profit margin of 90%.
The revenue for Zoryve, a product of Arcutis, saw a slight quarter-over-quarter decrease of 2%, attributed to the dynamics of new year payer, such as switches in commercial insurance and deductible resets. Despite this modest dip, second-quarter prescriptions are showing a promising upturn, prompting Jefferies to revise their price target upwards. According to InvestingPro, the company maintains strong liquidity with a current ratio of 4.15, while operating with moderate debt levels.
Looking ahead, Jefferies points to ARQ-255, a treatment for alopecia areata, as a potential catalyst for Arcutis’ stock value in mid-2025. The anticipation of topline results from ARQ-255 positions it as a key factor that may drive the company’s share value further. Get deeper insights into Arcutis’s potential with InvestingPro, which offers exclusive analysis and 8 additional ProTips for this stock.
The company’s stronger-than-expected revenue performance for its Zoryve product in the first quarter reflects a solid financial standing. With the second quarter on a favorable path and the potential impact of upcoming clinical results, Arcutis Biotherapeutics continues to demonstrate its growth potential in the biopharmaceutical industry. The stock has delivered an impressive 82% return over the past year, and according to InvestingPro’s Fair Value analysis, currently appears to be undervalued.
In other recent news, Arcutis Biotherapeutics reported its first-quarter 2025 financial results, which showed revenue exceeding analyst expectations. The company posted revenue of $65.8 million, surpassing the consensus estimate of $63.66 million. Net product revenue for ZORYVE, their topical treatment, increased by 196% year-over-year to $63.8 million, although it saw a 2% sequential decline from the previous quarter. Adjusted earnings per share were reported at -$0.20, slightly better than the projected -$0.21. Despite the revenue beat and a narrower-than-expected loss, investor sentiment appeared to focus on the sequential revenue decline and ongoing net losses. President and CEO Frank Watanabe noted the strong demand growth for the ZORYVE portfolio and highlighted expanding commercial and Medicaid coverage. The company remains optimistic, citing multiple upcoming catalysts, including a PDUFA action date for ZORYVE foam 0.3% in treating plaque psoriasis. Arcutis reports that over 425,000 prescriptions for ZORYVE have been filled since its launch.
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