Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX): An Overrated Stock Poised to Drop

For the period that ended December 31, 2019, the short interest in Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) stock is on the up. The 32.85% rise could be an indication that investors and traders expect a drop in the share price, often as a result of a drop in the business’ fundamentals. The average brokerage opinion at 0 suggests disposing off these shares. Between December 13 and December 31, the total count of shorted shares totaled 11.83 million. That number was 2,924,340 more shares compared with the total of 8.9 million shares in the space of prior two weeks, which suggests more traders or funds are betting that the company stock will move down. The average daily volume for CPRX at the December 31st settlement surged to 2,962,707, versus 2,165,230 at the December 13th report. That led days to cover to move at 3.991762, a 2.91% decrease compared to the 4.111379 days to cover recorded at the prior short interest data release.

In the recent trading session, Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) shares lost -2.17% or -0.09 points to close at $4.28 with a thin trading volume of 1.051 million shares. It opened the trading session at $4.37, the shares rose to $4.42 and dropped to $4.17, the range by which the price of stock traded the whole session. The company now has a market cap of $461 million and currently has 105.4 million outstanding shares. Catalyst Pharmaceuticals, Inc. (CPRX) stock has plunged -4.17 percent of market value in 21 trading days.

CPRX stock’s trailing 3-year beta is 2.49, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was $0.08 share in the trailing 52 weeks. The stock’s value surged 16.53 percent year to date (YTD) compared to a rise of 73.41 percent in 52 week’s period. The firm’s shares are still trading -44.26 percent below its 1-year high of $7.67 and 97 percent up from 52-week low of $2.17. The average consensus ranking on the company is 0, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a buy.

Catalyst Pharmaceuticals, Inc. (CPRX) is most likely going to rise 110.28 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $11 as 12-month high price target. This represents a whopping 157.01 percent increase from the current trading price of shares. The 52-week median price target given by the analysts is $9, which means a return possibility of 110.28 percent in comparison with the closing price of the stock of $4.28 in recent trading session. The lowest price set for the stock is $7 which is just above 63.55 percent from CPRX share’s price at the end of session.

Past records have indicated that shares in Catalyst Pharmaceuticals, Inc. declined on 24 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of CPRX’s Q4 earnings on March 11. Analysts are predicting revenue to climb 5780 percent to $29.4M in the financial fourth quarter, while EPS will soar by about -171.43 percent to $0.1 per share. In the last quarter, it’s earnings of $0.13 per share came better than the -$0.115, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $30.9M, missing the $32.82M analysts had expected. Earnings are seen to rise by -54.4 percent this year, 41.57 percent in the coming year.

Let’s take a glimpse at some insider activity at Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) and observe the pattern. The earliest insider trade happened on 12/05/2019. INGENITO GARY parted with a total of 150 thousand shares of the firm at average share price of $4.82. The total amount for the sale was set at $723 thousand. On completing this exchange, the Chief Medical Officer account balance was 0 thousand shares. The stock lost -11.2 percent from that insider sale. On 11/27/2019, INGENITO GARY, Chief Medical Officer, did a sale of 100 thousand shares at a price of $4.66 per share. This got rid of 466 thousand shares from the insider’s fortune and the stock experienced a -8.15 percent retreat in price since the news became public. This exchange saw 0 thousand shares get out from the Chief Medical Officer account.

On 11/21/2019, Chief Medical Officer INGENITO GARY recorded a sale transaction valued at $450 thousand. The sale at $4.5 a share has eliminated 100 thousand shares from the insider’s portfolio position. Meanwhile, shares price witnessed -4.89 percent decrease since the transaction reporting date. The company insider is left with 0 thousand shares remaining in the account. O’Keeffe Charles B, who works as Director at the company, performed a purchase of 10 thousand shares in a transaction worth $47 thousand. The acquisition recorded on 10/11/2019 was priced at $4.7 per share. The stock price plunged -8.94 percent since the transaction. O’Keeffe Charles B currently holds a stake of 553.38 thousand in CPRX stock which is worth $2.37 million after the insider buying.

The stock is lingering around the initial support level of $4.29. After this, the following support is at the zone of $4.2. Up until the time the CPRX stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 50.72 on the daily chart, and this may be a cause for concern. In case the price goes below $4.2 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $4.48 level may cause a pull-back move approaching $4.58 mark.

Catalyst Pharmaceuticals, Inc. (CPRX) shares are trading at a P/E ratio of 51.32 times earnings posted in the trailing 12 months. The industry CPRX deals with has an average P/E of 25.19. Its P/B ratio is standing at 6.06X compared to the 11.59 industry average. It is additionally sporting a 7.53 on the Price-to-Sales ratio, compared to the industry’s P/S average of 2.83. Catalyst Pharmaceuticals, Inc. has a 85.7% gross profit margin, with its operating margin around 12.2%. Alongside this, the company’s net profit margin currently stands at 13%.