How does ARCUTIS BIOTHERAPEUTICS INC (NASDAQ:ARQT) stack up against Mark Minervini’s strategy?

Our stock screener has spotted ARCUTIS BIOTHERAPEUTICS INC (NASDAQ:ARQT) as a stocks which checks several boxes as specified by Mark Minervini. We will dive into an analysis below.

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)

High Growth Assessment of ARQT

ChartMill assigns a proprietary High Growth Momentum Rating (HGM) to each stock. The score is computed by evaluating various growth and profitability aspects aspects, like EPS and revenue growth, accelleration, surprises and revisions. ARQT was assigned a score of 6 for growth:

Explosive Earnings Growth

• ARQT has shown positive momentum in its earnings per share (EPS) on a quarter-to-quarter (Q2Q) basis, with a 87.5% increase. This reflects the company's successful execution of its business strategies and its commitment to delivering improved financial results.
• Accelerating EPS growth for ARQT: the current Q2Q growth of 87.5% exceeds the previous quarter Q2Q growth of 54.79%.
• Over the past year, ARQT has demonstrated 70.41% growth in EPS, signifying its positive financial trajectory and potential for future profitability.
• The recent q2q revenue growth of 428.0% of ARQT showcases the company's ability to generate increasing revenue in a short period, reflecting its positive growth trajectory.
• 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 impressive 1-year revenue growth of 230.0%, ARQT showcases its ability to generate increased sales and revenue. This growth highlights the company's strong customer demand and its effective business strategies.
• Analysts' average next Quarter EPS Estimate for ARQT has witnessed a 36.46% 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.

Profitability & Financial Strength

• ARQT has shown positive growth in its operating margin over the past year, indicating improved operational efficiency. This growth highlights the company's ability to effectively manage costs and maximize profitability.
• The free cash flow (FCF) of ARQT has seen steady growth over the past year, indicating enhanced cash flow generation and financial health. This trend underscores the company's effective capital management and its ability to generate sustainable cash flows.
• A Debt/Equity ratio of 0.68 highlights ARQT's commitment to maintaining financial stability.

Strong Market Performance

• ARQT has exhibited strong Relative Strength(RS) in recent periods, with a current 95.79 rating. This indicates the stock's ability to outperform the broader market and reflects its competitive position.

Why is ARQT a setup?

ChartMill also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, ARQT exhibits a 3 setup rating, indicating its consolidation status in recent days and weeks.

Although ARQT has an excellent technical rating, it does not present a decent entry opportunity at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

For an up to date full technical analysis you can check the technical report of ARQT

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More ideas for high growth momentum stocks can be found on ChartMill in our High Growth Momentum + Trend Template screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.