Why Mark Minervini may look into CATALYST PHARMACEUTICALS INC (NASDAQ:CPRX)

In this article we will dive into CATALYST PHARMACEUTICALS INC (NASDAQ:CPRX) as a possible candidate for growth investing. Investors should always do their own research, but we noticed CATALYST PHARMACEUTICALS INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

A Technical Analysis using the Minervini Trend Template.

CPRX checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ 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 Analysis for CPRX

Every stock receives a High Growth Momentum Rating (HGM) from ChartMill, ranging from 0 to 10. This rating assesses various growth and profitability aspects, including historical and projected EPS and revenue growth. CPRX boasts a 7 out of 10:

Earnings Momentum

• The recent financial report of CPRX demonstrates a 41.94% increase in quarterly earnings compared to the previous quarter. This growth indicates positive momentum in the company's financials and suggests a promising upward trend
• Over the past year, CPRX has demonstrated 61.73% growth in EPS, signifying its positive financial trajectory and potential for future profitability.
• CPRX has experienced 52.41% growth in EPS over a 3-year period, demonstrating its ability to generate sustained and positive earnings momentum.
• The q2q revenue growth of 28.26% of CPRX highlights the company's ability to generate incremental revenue and suggests positive market demand for its products or services.
• CPRX shows accelerating Sales growth: when comparing the current Q2Q growth of 28.26% to the previous quarter Q2Q growth of 25.31%, we see the growth rate improving.
• Sales growth accelerated for 3 quarters in a row.
• The 1-year revenue growth of CPRX (23.47%) has been strong, reflecting the company's ability to generate consistent sales growth. This growth suggests the company's ability to meet customer needs and expand its market share.
• Over the past 3 months, analysts have adjusted their EPS Estimate for CPRX with a 15.91% change. This highlights the evolving outlook on the company's EPS potential.
• With a track record of beating EPS estimates in the last 4 quarters, CPRX showcases its consistent ability to deliver earnings surprises. This reflects the company's strong execution and its competitive position in the market.

Profitability & Financial Strength

• The operating margin of CPRX has seen steady growth over the past year, signaling improved profitability. This trend indicates the company's effective cost management and its ability to generate higher returns.
• CPRX has experienced growth in its profit margin over the past year, reflecting improved operational performance.
• With positive growth in its free cash flow (FCF) over the past year, CPRX showcases its ability to generate strong cash flows and maintain a solid financial position. This growth reflects the company's efficient utilization of capital and its commitment to long-term value creation.
• CPRX has a healthy Return on Equity(ROE) of 22.52%. This demonstrates the company's efficient utilization of capital and indicates its commitment to driving profitability.
• With a Debt-to-Equity ratio at 0.0, CPRX showcases its prudent financial management. The company's balanced approach between debt and equity reflects its commitment to maintaining a stable capital structure.

Market Strength & Institutional Confidence

• CPRX exhibits a favorable ownership structure, with an institutional shareholder ownership of 83.75%. This signifies a diverse investor base, which can contribute to a more stable and efficient market for the stock.
• The Relative Strength (RS) of CPRX has been consistently solid, with a current 95.69 rating. This highlights the stock's ability to exhibit sustained price strength and signifies its competitive advantage.

How do we evaluate the setup for CPRX?

ChartMill also provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, CPRX has a 4 as its setup rating:

Although CPRX has an excellent technical rating, the quality of the presented setup is not ideal 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.

Check the latest full technical report of CPRX for a complete technical analysis.

Concluding

Our High Growth Momentum + Trend Template screen will find you more ideas which meet the Minervini criteria.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.