Arcutis Biotherapeutics Inc. Common Stock (ARQT)

FairStock Score: 37/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Arcutis as a specialty dermatology business with a commercial product, ZORYVE, not as a pre-revenue biotech. The operating trend is real: in fiscal Q2 2026, the quarter ended 2026-06-30, filed revenue was $129.9M and net income was $15.0M, or diluted EPS $0.11. Earlier, fiscal Q3 2025, ended 2025-09-30, showed $99.2M revenue and $7.4M net income. But consistency is not there. Fiscal Q1 2026, ended 2026-03-31, had a $11.3M net loss. FY2025 revenue was $372.1M with a $16.1M net loss; FY2024 revenue was $166.5M with a $140.0M net loss; FY2023 revenue was $29.2M with a $262.1M net loss. The Lynch category is none because it lost money in each of the last four years. The balance sheet looks improved, with a FairStock debt-to-equity of 0.52, Altman Z-Score 5.22, Piotroski F-Score 7/9, and trailing free cash flow of $39.2M. Still, ROCE is only 5.09%, the FCF yield is just 1.2%, and the FairStock Score is 37/100, which does not shout durable quality. Valuation leaves no Graham margin of safety: at the 2026-10-13 close of $26.09, FairStock calculates P/E 118.59, P/B 14.82, EV/EBITDA 74.00, and a Graham Number of $2.95, for a margin of safety of -784.41%. Growth is attractive on paper, with revenue growth 59.33%, profit growth 194.48%, and PEG 0.61, but it is from a small base and lumpy quarters. The moat may come from topical dermatology formulations and prescriber relationships, but I cannot call it durable yet. I see an improving business priced for near-perfect execution.

In plain English: Arcutis Biotherapeutics is a small drug company that sells a topical skin treatment called ZORYVE for psoriasis, eczema and related conditions. Sales are growing quickly, and the company just had a profitable quarter, but it has lost money in recent full years. At the recent price, the shares look expensive compared with the company's current profits and accounting value.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer