Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) stock traded higher Thursday after Cantor Fitzgerald initiated coverage with an Overweight rating and a $48 price forecast, citing strong Zoryve sales growth and expansion opportunities in dermatology.

Cantor analyst Steve Seedhouse said Zoryve (roflumilast) leads the branded topical treatment market, providing a strong foundation for future growth.

Zoryve is a once-daily, nonsteroidal treatment available in cream and foam formulations. It is approved in the U.S. and Canada for plaque psoriasis, atopic dermatitis and seborrheic dermatitis.

The company reported second-quarter 2026 Zoryve net product sales of $129.9 million, up 59% year over year and 23% sequentially.

In June, the U.S. Food and Drug Administration approved Zoryve cream 0.3% for children as young as 2 with plaque psoriasis. This marked the company’s seventh FDA approval since 2022.

Cantor Sees Multibillion-Dollar Sales Potential

Seedhouse said Arcutis’ existing commercial business alone supports his bullish investment thesis.

He estimates Zoryve could generate peak sales of $2.6 billion to $3.5 billion by capturing 15% to 20% of the topical corticosteroid market.

Meanwhile, the FDA is reviewing Zoryve cream 0.05% for mild to moderate atopic dermatitis in infants ages 3 to 24 months. The agency has set a target decision date of Feb. 23, 2027.

Cantor views the infant indication as a significant growth opportunity because of the unmet need for effective nonsteroidal treatments.

The firm also sees potential upside from Zoryve’s expansion into hidradenitis suppurativa and vitiligo, which could support longer-term revenue growth.

Zoryve’s Competitive Edge

Seedhouse identified Incyte Corporation (NASDAQ:INCY) and its Opzelura treatment as Zoryve’s closest competitor by prescription volume.

However, Opzelura carries a boxed warning for atopic dermatitis. Its label also limits treatment to short-term, noncontinuous use in certain patients who have not responded adequately to other topical prescriptions or cannot use them.

Cantor believes these restrictions give Zoryve a meaningful competitive advantage and strengthen its growth prospects.

The firm initiated coverage with an Overweight rating and a $48 price forecast.

ARQT Price Action: Arcutis Biotherapeutics shares were up 8.77% at $28.72 at the time of publication on Thursday, according to Benzinga Pro data.

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Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.