For those who appreciate value investing, NASDAQ:CPRX is a compelling option with its solid fundamentals.

Our stock screener has spotted CATALYST PHARMACEUTICALS INC (NASDAQ:CPRX) as an undervalued stock with solid fundamentals. NASDAQ:CPRX shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Valuation Analysis for NASDAQ:CPRX

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:CPRX has received a 8 out of 10:

• Based on the Price/Earnings ratio, CPRX is valued cheaply inside the industry as 95.91% of the companies are valued more expensively.
• When comparing the Price/Earnings ratio of CPRX to the average of the S&P500 Index (27.29), we can say CPRX is valued slightly cheaper.
• 96.98% of the companies in the same industry are more expensive than CPRX, based on the Price/Forward Earnings ratio.
• CPRX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.78.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CPRX indicates a rather cheap valuation: CPRX is cheaper than 95.91% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, CPRX is valued cheaper than 97.69% of the companies in the same industry.
• CPRX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The excellent profitability rating of CPRX may justify a higher PE ratio.
• CPRX's earnings are expected to grow with 34.80% in the coming years. This may justify a more expensive valuation.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:CPRX, the assigned 8 is noteworthy for profitability:

• CPRX has a Return On Assets of 9.64%. This is amongst the best in the industry. CPRX outperforms 95.73% of its industry peers.
• CPRX's Return On Equity of 11.19% is amongst the best of the industry. CPRX outperforms 95.55% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 10.83%, CPRX belongs to the top of the industry, outperforming 96.09% of the companies in the same industry.
• CPRX had an Average Return On Invested Capital over the past 3 years of 20.38%. This is significantly above the industry average of 13.59%.
• The 3 year average ROIC (20.38%) for CPRX is well above the current ROIC(10.83%). The reason for the recent decline needs to be investigated.
• The Profit Margin of CPRX (15.68%) is better than 96.09% of its industry peers.
• CPRX's Operating Margin of 19.76% is amongst the best of the industry. CPRX outperforms 96.44% of its industry peers.
• CPRX has a Gross Margin of 86.67%. This is amongst the best in the industry. CPRX outperforms 90.04% of its industry peers.

ChartMill's Evaluation of Health

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:CPRX was assigned a score of 8 for health:

• CPRX has an Altman-Z score of 17.85. This indicates that CPRX is financially healthy and has little risk of bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 17.85, CPRX belongs to the top of the industry, outperforming 91.46% of the companies in the same industry.
• CPRX has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• CPRX has a Current Ratio of 5.14. This indicates that CPRX is financially healthy and has no problem in meeting its short term obligations.
• CPRX has a Quick Ratio of 4.94. This indicates that CPRX is financially healthy and has no problem in meeting its short term obligations.

Evaluating Growth: NASDAQ:CPRX

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:CPRX boasts a 9 out of 10:

• CPRX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 63.89%, which is quite impressive.
• The Earnings Per Share has been growing by 25.48% on average over the past years. This is a very strong growth
• The Revenue has grown by 85.90% in the past year. This is a very strong growth!
• The Revenue has been growing by 280.39% on average over the past years. This is a very strong growth!
• Based on estimates for the next years, CPRX will show a very strong growth in Earnings Per Share. The EPS will grow by 32.43% on average per year.
• CPRX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.81% yearly.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of CPRX contains the most current fundamental analsysis.

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.