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ZYBERNO

Stock Report

Updated Aug 30, 2026

ARCUTIS BIOTHERAPEUTICS, INC. (ARQT)

Healthcare • NASDAQ

$23.78

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

42.0/100

WEAK BUSINESS

ARCUTIS BIOTHERAPEUTICS, INC. (ARQT) scores 42/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full ARQT quality analysis & detailed breakdown

VALUATION SIGNAL

N/A (Requires more data)

Requires fair value calculation and current price data

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full ARQT valuation analysis · → View full ARQT Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-6.6%)

Debt-to-Equity (Solvency Risk):GOOD (0.48x)

Operating Margin (Operational Efficiency):CRITICAL (-1.1%)

Return on Capital (Capital Efficiency):CRITICAL (-1.2%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

ARCUTIS BIOTHERAPEUTICS, INC. (ARQT) stock report — Zyberno Score 42/100 (WEAK BUSINESS). Full financial analysis on Zyberno.

Over the trailing twelve months, ARQT generated $26.92M in Owner Earnings. Capital was deployed as follows: $78.00K invested in capital expenditures. Reinvestment rate: 108.6%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:23.78

Market Cap:$3.10B

Valuation Multiples (3)

P/B Ratio:14.07x

P/S Ratio:6.69x

Peg Ratio:-999.00x

Enterprise Metrics (3)

Enterprise Value:$3.18B

Ev Ebitda Ratio:538.47x

Pfcf Ratio:115.31x

Price Action & Momentum (3)

12-1 Momentum:

+95.1% (90th pctile)

📈 Click to view full ARQT Momentum analysis →

Momentum Percentile:90 / 100

% of 52-Week High:74.9%

B. Profitability Assessment

Return Metrics (5)

ROE:

-6.6%

📊 Click to view full ARQT ROE analysis →

ROA:-2.8%

Roic:

-1.2%

📊 Click to view full ARQT ROIC analysis →

Reinvestment Rate:108.6%

Fundamental Growth Rate (g):-1.4%

Margin Analysis (3)

Operating Margin Ttm:-1.1%

Net Margin Ttm:-2.7%

Ebitda Margin:1.3%

TTM Performance (3)

Gross Margin Ttm:91.1%

Operating Margin Ttm:-1.1%

Net Margin Ttm:-2.7%

Yield Metrics (3)

Earnings Yield:-$0.46

Owner Earnings Yield:$0.87

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.03

📊 Click to view full ARQT Earnings Surprise analysis →

EPS Surprise vs Expected:17.3%

Latest Earnings Filed:2026-08-05

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):100.0%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:2.92x

Quick Ratio:2.67x

Cash Ratio:0.21x

Leverage Analysis (3)

Debt To Equity Ttm:0.48x

Debt-to-Equity Ratio:0.48x

Debt To Ebitda:18.45x

Coverage Ratios (2)

Interest Coverage Ratio:-0.88x

Times Interest Earned:-0.88

Capital Structure (4)

Working Capital:307,331,000.00

Cash And Cash Equivalents:34,121,000.00

Long Term Debt:$101.95M

Net Debt:$74.78M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $463.98M

Linear Growth: 100.0%

📊 Click to view full ARQT Revenue analysis & methodology →

Cost Of Revenue Ttm:$41.10M

Profitability Breakdown (2)

Gross profit TTM: $422.89M

Linear Growth: 79.1%

📊 Click to view full ARQT Gross Profit analysis & methodology →

-$4.89M

Bottom Line Performance (3)

-$12.43M

Income Before Tax:-$8.24M

Ebitda Ttm:5,903,000.00

Operating Expenses (5)

Operating Expenses:429,728,000.00

R And D Expense:91,037,000.00

Sga Expense:297,595,000.00

Income Tax Expense:$779.00K

Interest Expense:13,846,000.00

Expense Ratios (3)

R And D To Revenue Percentage:70.1%

Sga To Revenue Percentage:229.2%

Ebitda Margin:1.3%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$488.54M

Current Assets:$467.67M

Ppe Net:872,000.00

Goodwill:0.00

Intangible Assets:$13.69M

Liability Structure (4)

Total Liabilities:267,958,000.00

Current Liabilities:160,340,000.00

Long Term Debt:$101.95M

Short Term Debt:$6.95M

Equity & Capital (3)

Equity:$220.58M

Retained Earnings:-$1.13B

Common Stock:300,000,000.00

Working Capital Items (3)

Accounts Receivable:155,162,000.00

Inventory:38,879,000.00

Accounts Payable:146,786,000.00

Special Items (2)

Contract Liabilities:0.00

Stock Based Compensation:12,762,000.00

C. Cash Flow Analysis

Operating Activities (2)

$26.99M$26.92M

Investment Activities (2)

Investing Cash Flow:-$11.33M

Capital Expenditures Ttm:78,000.00

Financing Activities (3)

Financing Cash Flow:$1.07M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:10,790,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-0.11

-$0.11

Earnings Per Share Ttm:-$0.10

Revenue & Cash Per Share (3)

Sales Per Share Ttm:3.55

Operating Cash Flow Per Share:-$0.04

Fcf Per Share Ttm:0.21

Book Value & Capital (2)

Book Value Per Share:$1.69

Cash Per Share:0.26

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:1.06x

Working Capital Turnover Ttm:1.51x

Receivables Management (2)

Receivables Turnover Ttm:2.99x

Days Sales Outstanding Ttm:122.06

Inventory Management (2)

Inventory Turnover Ttm:1.06x

Days Inventory Outstanding Ttm:345.31

Payables & Cash Cycle (2)

Days Payable Outstanding:1,303.70

Cash Conversion Cycle:-836.33

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:80.00

Quality Score:35.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $26.92M

Linear Growth: 0.0%

📊 Click to view full ARQT Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.21

Owner Earnings Yield:$0.87

Damodaran Growth Analysis (2)

Reinvestment Rate:108.6%

Fundamental Growth Rate (g):-1.4%

Return Scenarios (1)

Forward Expected Return (Yield + Growth):

-0.5%

📊 Click to view full ARQT expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (1)

Revenue Growth Rate (Linear):100.0%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):79.1%

Book Value Growth Rate (Linear):1.0%

C. Company Profile & Context

Corporate Information (6)

Symbol:ARQT

Company Name:ARCUTIS BIOTHERAPEUTICS, INC.

Sector:Healthcare

Industry:Pharmaceuticals

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:130.52M

Shares Outstanding Basic:130.52M

Shares Outstanding Diluted:135.90M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-30 22:17:11 UTC

Data Timestamp:2026-08-30T22:17:11.836610