NASDAQ:CPRX, an undervalued stock with good 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.

How do we evaluate the Valuation for NASDAQ:CPRX?

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:CPRX was assigned a score of 8 for valuation:

• Based on the Price/Earnings ratio, CPRX is valued cheaply inside the industry as 95.93% of the companies are valued more expensively.
• Compared to an average S&P500 Price/Earnings ratio of 27.28, CPRX is valued a bit cheaper.
• Based on the Price/Forward Earnings ratio, CPRX is valued cheaper than 96.46% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of CPRX to the average of the S&P500 Index (23.53), we can say CPRX is valued slightly cheaper.
• CPRX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CPRX is cheaper than 97.52% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, CPRX is valued cheaper than 97.88% of the companies in the same industry.
• The 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.
• A more expensive valuation may be justified as CPRX's earnings are expected to grow with 34.80% in the coming years.

Analyzing Profitability Metrics

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:CPRX scores a 8 out of 10:

• With an excellent Return On Assets value of 18.50%, CPRX belongs to the best of the industry, outperforming 98.41% of the companies in the same industry.
• The Return On Equity of CPRX (21.61%) is better than 97.35% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 20.22%, CPRX belongs to the top of the industry, outperforming 98.23% 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 13.83%.
• CPRX has a better Profit Margin (31.01%) than 98.23% of its industry peers.
• The Operating Margin of CPRX (37.78%) is better than 99.11% of its industry peers.
• CPRX's Gross Margin of 86.32% is amongst the best of the industry. CPRX outperforms 89.73% of its industry peers.

ChartMill's Evaluation of Health

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:CPRX has achieved a 8 out of 10:

• An Altman-Z score of 16.73 indicates that CPRX is not in any danger for bankruptcy at the moment.
• CPRX's Altman-Z score of 16.73 is amongst the best of the industry. CPRX outperforms 91.68% of its industry peers.
• CPRX has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
• A Current Ratio of 5.11 indicates that CPRX has no problem at all paying its short term obligations.
• CPRX has a Quick Ratio of 4.92. This indicates that CPRX is financially healthy and has no problem in meeting its short term obligations.

Growth Assessment of NASDAQ:CPRX

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:CPRX has achieved a 9 out of 10:

• The Earnings Per Share has grown by an impressive 63.89% over the past year.
• CPRX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.48% yearly.
• The Revenue has grown by 32.13% 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.
• Based on estimates for the next years, CPRX will show a quite strong growth in Revenue. The Revenue will grow by 14.81% on average per year.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

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.