Arcutis Biotherapeutics (NASDAQ:ARQT) Shares Gap Down on Disappointing Earnings

Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) gapped down prior to trading on Thursday following a dissappointing earnings announcement. The stock had previously closed at $34.05, but opened at $29.00. Arcutis Biotherapeutics shares last traded at $28.04, with a volume of 749,296 shares traded.

The company reported $0.06 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.18 by ($0.12). The company had revenue of $143.92 million during the quarter, compared to analysts’ expectations of $142.59 million. Arcutis Biotherapeutics had a net margin of 6.15% and a return on equity of 15.05%.

More Arcutis Biotherapeutics News

Here are the key news stories impacting Arcutis Biotherapeutics this week:

• Positive Sentiment: Arcutis began enrolling participants in INTEGUMENT-3, a Phase 3 study of ZORYVE cream 0.3% for moderate-to-severe atopic dermatitis. The trial could support expansion of the treatment into a broader patient population, although it is early-stage progress and provides no efficacy results yet. Phase 3 enrollment announcement
• Positive Sentiment: Third-quarter revenue of $143.92 million edged past the roughly $142.6 million analyst estimate, offering a modest positive against the earnings shortfall. Third-quarter results and business update
• Neutral Sentiment: Several executives reported stock sales. The filings say the transactions were to cover tax withholding on vested equity awards, and one was made under a pre-arranged Rule 10b5-1 plan, which makes them less clearly indicative of a negative outlook. Insider transaction report
• Negative Sentiment: Quarterly EPS was $0.06, below analysts’ estimates of approximately $0.17–$0.18 and flat compared with the year-ago quarter. The miss may temper the positive reaction to the revenue beat. Q3 earnings estimate report

Analysts Set New Price Targets

Several research firms have recently issued reports on ARQT. TD Cowen reaffirmed a “buy” rating on shares of Arcutis Biotherapeutics in a research report on Thursday. Morgan Stanley raised their target price on Arcutis Biotherapeutics from $34.00 to $38.00 and gave the stock an “overweight” rating in a research report on Thursday, August 6th. Weiss Ratings upgraded Arcutis Biotherapeutics from a “hold (c-)” rating to a “hold (c)” rating in a research note on Thursday, October 29th. Jefferies Financial Group restated a “buy” rating and set a $39.00 target price on shares of Arcutis Biotherapeutics in a research note on Thursday, October 8th. Finally, Guggenheim boosted their price objective on shares of Arcutis Biotherapeutics from $38.00 to $44.00 and gave the stock a “buy” rating in a research report on Monday, October 19th. Eight research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus target price of $39.12.

Insider Transactions at Arcutis Biotherapeutics

In other Arcutis Biotherapeutics news, Director Howard G. Welgus sold 4,728 shares of Arcutis Biotherapeutics stock in a transaction that occurred on Thursday, October 15th. The stock was sold at an average price of $26.93, for a total transaction of $127,325.04. Following the transaction, the director owned 35,207 shares of the company’s stock, valued at $948,124.51. The trade was a 11.84% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Patrick Burnett sold 943 shares of Arcutis Biotherapeutics stock in a transaction on Monday, November 2nd. The shares were sold at an average price of $31.86, for a total transaction of $30,043.98. Following the completion of the transaction, the executive vice president owned 116,649 shares in the company, valued at approximately $3,716,437.14. This represents a 0.80% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders sold 123,932 shares of company stock worth $3,553,077. Insiders own 9.40% of the company’s stock.

Hedge Funds Weigh In On Arcutis Biotherapeutics

Several institutional investors have recently bought and sold shares of the company. Fulcrum Asset Management LLP purchased a new stake in shares of Arcutis Biotherapeutics during the 3rd quarter worth approximately $2,628,000. Candriam S.C.A. increased its position in Arcutis Biotherapeutics by 5.7% during the third quarter. Candriam S.C.A. now owns 1,003,729 shares of the company’s stock worth $26,625,000 after buying an additional 53,890 shares in the last quarter. Oregon Public Employees Retirement Fund acquired a new position in shares of Arcutis Biotherapeutics in the third quarter worth $679,000. Mirae Asset Global Investments Co. Ltd. acquired a new position in shares of Arcutis Biotherapeutics in the third quarter worth $170,000. Finally, Profund Advisors LLC raised its holdings in shares of Arcutis Biotherapeutics by 19.3% in the third quarter. Profund Advisors LLC now owns 49,700 shares of the company’s stock worth $1,314,000 after acquiring an additional 8,045 shares during the last quarter.

Arcutis Biotherapeutics Price Performance

The firm has a market capitalization of $3.54 billion, a PE ratio of 134.13 and a beta of 1.66. The company has a 50-day moving average price of $27.11 and a 200-day moving average price of $25.37. The company has a debt-to-equity ratio of 0.46, a current ratio of 2.92 and a quick ratio of 2.67.

About Arcutis Biotherapeutics

Arcutis Biotherapeutics, Inc is a commercial-stage biopharmaceutical company focused on developing and delivering treatments for dermatologic conditions. The company’s portfolio is centered on therapies designed to address inflammatory skin diseases, with an emphasis on nonsteroidal topical medicines that may help patients manage chronic conditions.

Arcutis’s lead product is ZORYVE (roflumilast), a topical phosphodiesterase-4 inhibitor. ZORYVE has received U.S. Food and Drug Administration approvals for multiple dermatological uses, including plaque psoriasis, seborrheic dermatitis and atopic dermatitis, in different cream and foam formulations.