Would Mark Minervini consider ARCUTIS BIOTHERAPEUTICS INC (NASDAQ:ARQT) a top stock pick?

In this article we will dive into ARCUTIS BIOTHERAPEUTICS INC (NASDAQ:ARQT) as a possible candidate for growth investing. Investors should always do their own research, but we noticed ARCUTIS BIOTHERAPEUTICS INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

Does ARQT pass the Minervini Trend Template check?

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for ARQT:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Looking into the high growth metrics of ARQT

Every stock receives a High Growth Momentum Rating (HGM) from ChartMill, ranging from 0 to 10. This rating assesses various growth and profitability aspects, including historical and projected EPS and revenue growth. ARQT boasts a 6 out of 10:

Explosive Earnings Growth

• The quarterly earnings of ARQT have shown a 87.5% increase compared to the previous quarter, as revealed in the recent financial report. This growth signifies positive momentum in the company's financials, pointing towards a promising upward trend
• ARQT shows accelerating EPS growth: when comparing the current Q2Q growth of 87.5% to the previous quarter Q2Q growth of 54.79%, we see the growth rate improving.
• The 1-year EPS growth of ARQT (70.41%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• The q2q revenue growth of 428.0% of ARQT highlights the company's ability to generate incremental revenue and suggests positive market demand for its products or services.
• The sales growth of ARQT is accelerating: the current Q2Q growth of 428.0% is above the previous quarter Q2Q growth of 17.44%. Sales momentum and acceleration are key for high growth systems.
• With notable 1-year revenue growth of 230.0%, ARQT exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for future growth.
• Analysts' average next Quarter EPS Estimate for ARQT has witnessed a 39.44% change in the last 3 months, underscoring the evolving market expectations towards the company's EPS prospects.
• ARQT has consistently surpassed EPS estimates in the last 4 quarters, reflecting its strong financial performance and effective management. This trend suggests the company's ability to generate positive earnings surprises and drive shareholder value.

Financial Strength & Profitability

• With positive growth in its operating margin over the past year, ARQT showcases its ability to improve profitability through effective cost control and operational efficiency. This growth underscores the company's commitment to enhancing its financial performance.
• ARQT has shown positive growth in its free cash flow (FCF) over the past year, indicating improved cash generation and financial strength. This growth highlights the company's ability to effectively manage its cash flows and generate surplus funds.
• With a Debt/Equity ratio of 0.68, ARQT appears to have a manageable debt load relative to its assets.

Strong Market Performance

• The Relative Strength (RS) of ARQT has been consistently solid, with a current 95.53 rating. This highlights the stock's ability to exhibit sustained price strength and signifies its competitive advantage.

Looking at the Setup

ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, ARQT has a 5 as its setup rating, indicating its current consolidation status.

Although the technical rating is only medium, ARQT does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price.

Check the latest full technical report of ARQT for a complete technical analysis.

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Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.