Monday's IBD 50 Growth Stocks To Watch pick, biotech leader Arcutis Biotherapeutics, is breaking out past two buy points. That makes Arcutis stock one of the best stocks to watch right now.
Arcutis Biotherapeutics develops dermatology treatments for unmet needs of immune-related skin diseases and conditions.
Its main products approved by the U.S. Food and Drug Administration are Zoryve foam and cream. Both are used topically to treat forms of psoriasis and dermatitis. Second-quarter sales of Zoryve were $81.5 million, a 164% increase over the same period a year earlier.
In May, Arcutis received FDA approval for Zoryve foam for scalp and body psoriasis in adults and adolescents age 12 and older in May and began sales in June.
"Looking ahead, we remain focused on expanding the approved uses of Zoryve to the youngest patients, with the potential Q4 approval of Zoryve cream 0.05% for 2 to 5 year olds with atopic dermatitis and the initiation of an infant atopic dermatitis study," Chief Executive Frank Watanabe said in the company's second-quarter earnings report.
On Aug. 6, Arcutis posted a loss of 13 cents a share, narrower by 69% from a year ago when it lost 42 cents a share. Revenue surged 164% to $81.5 million. The results surpassed Wall Street's consensus estimates. The company is expected to turn profitable in 2026, according to IBD MarketSurge.
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Arcutis Stock Breaks Out
Arcutis stock midday Monday surged more than 6%, breaking out past a 17.75 buy point in a cup base, per IBD MarketSurge chart analysis. The 5% buy zone runs up to 18.64. In addition, an alternative entry at 18.15 is also in play.
At Monday's high price of 18.92, shares had rallied 35.8% on the year, far above the S&P 500's more than 13% year-to-date return.
Arcutis stock shows an 88 out of a top-level 99 IBD Composite Rating, according to IBD Stock Checkup. And that will likely improve following Monday's bullish price action. That makes the biotech leader one of the best stocks to watch in the ongoing stock market rally.
With IBD's recommended equity exposure range of 80%-100%, investors have the flexibility to buy breakouts among top stocks.
The relative strength line reached its highest level since early April on Monday, confirming that Arcutis stock is starting to show strong stock market outperformance. The RS line measures a stock's price performance vs. the S&P 500 and provides insight into a stock's market leadership status.
Arcutis stock has a 21-day average true range, or ATR, of 4.29%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.
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Best Stocks To Watch
These three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to watch:
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Palantir Technologies | 190 | Cup base | |
| Interactive Brokers | 68.07 | Cup base | |
| American Superconductor | 58.42 | Cup base |
Source: IBD Data As Of Sept. 29
Follow Scott Lehtonen on X at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
