If you are wondering whether Arcutis Biotherapeutics is still worth a closer look after its big run up, or if most of the upside is already priced in, this article is for you.
The stock has been volatile lately, slipping about 7.0% over the last week, but it is still up 16.1% over 30 days, 99.3% year to date and 128.7% over the past year, which hints at shifting expectations and risk appetite.
Those moves have come as investors focus on Arcutis Biotherapeutics’ progress in dermatology, including regulatory milestones and an expanding commercial rollout that could reshape its long term revenue profile. At the same time, sentiment has been swinging as the market weighs execution risks against the potential for its lead treatments to capture meaningful share in crowded therapeutic areas.
Against that backdrop, our valuation checks suggest Arcutis Biotherapeutics scores 3/6 on undervaluation, which means it looks inexpensive on some metrics but not others. Next, we will break down what different valuation approaches are saying about the stock today, and then finish with a more holistic way to think about what Arcutis Biotherapeutics might be worth.
A Discounted Cash Flow model estimates what a company might be worth by projecting the cash it could generate in the future and discounting those cash flows back to today in $ terms. For Arcutis Biotherapeutics, the 2 Stage Free Cash Flow to Equity model starts from last twelve months free cash flow of about $45.4 Million outflow, reflecting the investment phase of its dermatology pipeline.
Analysts expect this to swing strongly positive over time, with Simply Wall St aggregating forecasts and extrapolations that point to free cash flow rising to around $469.1 Million by 2035. The discounted value of the next decade of projected cash flows totals several hundred Million dollars. The model then adds a terminal value to capture cash flows beyond the explicit forecast period.
Putting this together, the DCF model arrives at an intrinsic value of roughly $69.25 per share. With the DCF indicating the stock is about 58.1% undervalued relative to the current market price, the market appears to be heavily discounting Arcutis Biotherapeutics future cash generation potential.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Arcutis Biotherapeutics is undervalued by 58.1%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.
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ARQT Discounted Cash Flow as at Dec 2025
Price to Sales is often a useful yardstick for valuing high growth or not yet profitable companies, because it focuses on what investors are paying for each dollar of current revenue instead of earnings that may still be negative or volatile. The higher the expected growth and the lower the perceived risk, the more investors are usually willing to pay, which translates into a higher, but still justifiable, sales multiple.
Arcutis Biotherapeutics currently trades on a Price to Sales ratio of about 11.18x. That is slightly below the broader Biotechs industry average of roughly 12.08x, but well above the peer group average of around 5.84x. This suggests investors already price in stronger growth or a better competitive position than many direct comparables. Simply Wall St’s proprietary Fair Ratio for Arcutis Biotherapeutics is 10.05x, which represents the multiple that would typically be warranted given the company’s growth outlook, risk profile, profit margins, size and industry context.
The Fair Ratio is more informative than a simple peer or industry comparison because it adjusts for company specific fundamentals rather than assuming all biotechs deserve the same multiple. Comparing the Fair Ratio of 10.05x with the current 11.18x suggests the shares look somewhat expensive on a sales basis.
Result: OVERVALUED
NasdaqGS:ARQT PS Ratio as at Dec 2025
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Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to turn your view of Arcutis Biotherapeutics into a story that connects assumptions about future revenue, earnings and margins to a financial forecast and, ultimately, a fair value estimate. On Simply Wall St’s Community page, Narratives allow millions of investors to spell out why they think a company will win or struggle, link that story directly to projected financials, and then compare the resulting Fair Value with today’s share price to decide whether it might be time to buy, hold or sell. Because Narratives update dynamically when new information, like clinical data, FDA decisions or earnings guidance, is released, your view of Arcutis Biotherapeutics can evolve in real time instead of relying on a static model. For example, one investor might build a bullish Narrative that sees Arcutis Biotherapeutics as a potential $40.00 per share opportunity, while another more conservative Narrative might anchor closer to $21.86, and comparing these against the current price helps you judge which story you find more realistic.
Do you think there’s more to the story for Arcutis Biotherapeutics? Head over to our Community to see what others are saying!
NasdaqGS:ARQT 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ARQT.
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