On Monday, Mizuho (NYSE:) Securities demonstrated confidence in Arcutis Biotherapeutics Inc . (NASDAQ:) by increasing the price target for the company’s stock from $19.00 to $20.00. The firm sustained its Outperform rating on the biopharmaceutical company, which has shown remarkable momentum with a 294% return over the past year. According to InvestingPro data, the stock is currently trading near its 52-week high of $15.79, suggesting strong market confidence.
The upgrade comes with a positive outlook for Arcutis, as Mizuho analysts foresee the company embarking on a strong start to the year. Supporting this optimism, InvestingPro data reveals impressive revenue growth of 183% in the last twelve months, along with a robust gross profit margin of 89.6%. Adjustments to the firm’s financial model were made, leading to an elevation in the projected sales for Arcutis’s Zoryve franchise. For the fourth quarter of 2024, sales estimates have been raised from $52.1 million to $57.0 million, and for the full year 2025, from $255 million to $277 million. These figures surpass the consensus estimates of $55 million for the fourth quarter and $267 million for the full year.
Mizuho’s analysts have not factored in the potential advantages of Arcutis’s co-promotion agreement with Kowa Company, Ltd. in the primary care and pediatrics markets into their sales forecast for 2025. The collaboration, however, is viewed as a possible source of additional upside or a safeguard for the firm’s sales projections, which already exceed the consensus.
The raised forecast and price target are supported by the expectation that consensus sales figures for Zoryve in 2025 may be revised upward. Additionally, Mizuho anticipates a potentially significant but underrecognized positive impact from Eli Lilly (NYSE:)’s Ucenprubart on ARQ-234, which is seen as a considerable embedded option in Arcutis’s portfolio. For deeper insights into ARQT’s valuation and growth potential, investors can access comprehensive analysis and 13 additional ProTips through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Arcutis Biotherapeutics has seen significant growth in its ZORYVE product line, with a notable 452% increase in net product revenues year-over-year. Analysts from H.C. Wainwright have initiated a Buy rating on Arcutis, emphasizing the potential of ZORYVE products for treating psoriasis and atopic dermatitis. The firm also highlighted the successful launch of ZORYVE foam for seborrheic dermatitis, which has boosted the use of ZORYVE cream for psoriasis patients.
Arcutis has reported a 25% increase in total ZORYVE prescriptions and plans to expand the product’s label by mid-2025. In addition, the company has announced several key executive promotions, including Patrick Burnett to Executive Vice President, Chief Medical (TASE:) Officer, and L. Todd Edwards to Executive Vice President, Chief Commercial Officer.
H.C. Wainwright analysts anticipate that ZORYVE could achieve $1 billion in sales across all indications by 2033 and suggest that as ZORYVE demonstrates its commercial viability, it may become a target for strategic mergers and acquisitions. Arcutis aims to reach financial breakeven by 2026 without the need for further equity market funding.
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