Arcutis Biotherapeutics (NASDAQ:ARQT) Shares Gap Down Following Weak Earnings

Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT)’s share price 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 changing hands.

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

Trending Headlines about Arcutis Biotherapeutics

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

Wall Street Analysts Forecast Growth

A number of research firms have recently issued reports on ARQT. Wall Street Zen downgraded shares of Arcutis Biotherapeutics from a “strong-buy” rating to a “buy” rating in a research report on Saturday, October 10th. Cantor Fitzgerald started coverage on shares of Arcutis Biotherapeutics in a research note on Thursday, October 15th. They set an “overweight” rating and a $48.00 price objective on the stock. Weiss Ratings upgraded shares of Arcutis Biotherapeutics from a “hold (c-)” rating to a “hold (c)” rating in a report on Thursday, October 29th. TD Cowen reaffirmed a “buy” rating on shares of Arcutis Biotherapeutics in a research report on Thursday. Finally, Needham & Company LLC set a $40.00 price objective on Arcutis Biotherapeutics in a report on Thursday. Eight analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average target price of $39.12.

Insiders Place Their Bets

In other news, Director Howard Welgus sold 4,728 shares of Arcutis Biotherapeutics stock in a transaction 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 in the company, valued at approximately $948,124.51. The trade was a 11.84% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Todd Watanabe sold 4,377 shares of the company’s stock in a transaction on Monday, November 2nd. The shares were sold at an average price of $31.86, for a total value of $139,451.22. Following the transaction, the insider directly owned 712,826 shares in the company, valued at $22,710,636.36. The trade was a 0.61% 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. Insiders have sold a total of 123,932 shares of company stock valued at $3,553,077 over the last quarter. 9.40% of the stock is owned by insiders.

Institutional Investors Weigh In On Arcutis Biotherapeutics

Several institutional investors and hedge funds have recently modified their holdings of ARQT. Montanova Capital LLC boosted its holdings in Arcutis Biotherapeutics by 0.9% in the second quarter. Montanova Capital LLC now owns 12,437,000 shares of the company’s stock worth $326,098,000 after purchasing an additional 110,000 shares in the last quarter. BlackRock Inc. bought a new position in Arcutis Biotherapeutics during the second quarter valued at about $276,502,000. Bank of America Corp DE bought a new position in Arcutis Biotherapeutics during the second quarter valued at about $78,330,000. Janus Henderson Group PLC raised its holdings in Arcutis Biotherapeutics by 1.3% during the first quarter. Janus Henderson Group PLC now owns 1,854,566 shares of the company’s stock valued at $43,684,000 after buying an additional 24,505 shares in the last quarter. Finally, Jupiter Topco LLC acquired a new stake in shares of Arcutis Biotherapeutics in the second quarter worth about $36,989,000.

Arcutis Biotherapeutics Stock Down 17.4%

The company has a market cap of $3.54 billion, a price-to-earnings ratio of 134.13 and a beta of 1.66. The business has a 50-day simple moving average of $27.11 and a two-hundred day simple moving average of $25.37. The company has a quick ratio of 2.67, a current ratio of 2.92 and a debt-to-equity ratio of 0.46.

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.