CATALYST PHARMACEUTICALS INC (NASDAQ:CPRX) is a candidate for high growth investors. Here's why.

CATALYST PHARMACEUTICALS INC (NASDAQ:CPRX) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:CPRX.

Technical analysis of CPRX

ChartMill utilizes a proprietary algorithm to assign a Technical Rating to every stock. This rating, ranging from 0 to 10, is computed daily by analyzing a variety of technical indicators and properties.

We assign a technical rating of 9 out of 10 to CPRX. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, CPRX is showing a nice and steady performance.

• The long term trend is positive and the short term trend is neutral. The long term trend may just continue or reversal may be around the corner!
• Looking at the yearly performance, CPRX did better than 91% of all other stocks. We also observe that the gains produced by CPRX over the past year are nicely spread over this period.
• CPRX is one of the better performing stocks in the Biotechnology industry, it outperforms 92% of 562 stocks in the same industry.
• CPRX is currently trading in the upper part of its 52 week range. The S&P500 Index is also trading in the upper part of its 52 week range, so CPRX is performing more or less in line with the market.
• In the last month CPRX has a been trading in the 20.80 - 25.01 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

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

How does the Setup look for CPRX

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, CPRX has a 7 as its setup rating, indicating its current consolidation status.

Besides having an excellent technical rating, CPRX also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 23.12, a Stop Loss order could be placed below this zone.

ChartMill's Evaluation of Growth

ChartMill employs its own High Growth Momentum Rating (HGM) system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth and profitability factors, such as EPS and revenue growth, as well as accelleration, surprises and revision history. CPRX has earned a 6:

Explosive Earnings Growth

• CPRX has shown positive momentum in its earnings per share (EPS) on a quarter-to-quarter (Q2Q) basis, with a 258.0% increase. This reflects the company's successful execution of its business strategies and its commitment to delivering improved financial results.
• Accelerating EPS growth for CPRX: the current Q2Q growth of 258.0% exceeds the previous quarter Q2Q growth of 41.94%.
• CPRX has experienced 143.0% growth in EPS over a 12 month period, demonstrating its ability to generate sustained and positive earnings momentum.
• CPRX has experienced 52.41% growth in EPS over a 3-year period, demonstrating its ability to generate sustained and positive earnings momentum.
• The recent q2q revenue growth of 43.56% of CPRX showcases the company's ability to generate increasing revenue in a short period, reflecting its positive growth trajectory.
• Accelerating Sales growth for CPRX: the current Q2Q growth of 43.56% exceeds the previous quarter Q2Q growth of 28.27%.
• Sales acceleration happened 3 quarters in a row.
• CPRX has demonstrated strong 1-year revenue growth of 23.49%, reflecting revenue momentum and its ability to generate consistent top-line expansion. This growth underscores the company's strong market position and its potential for future success.
• Over the past 3 months, analysts have adjusted their EPS Estimate for CPRX with a 10.87% change. This highlights the evolving outlook on the company's EPS potential.
• CPRX has consistently surpassed EPS estimates in the last 4 quarters, reflecting its strong financial performance and effective management. This trend suggests the company's ability to generate positive earnings surprises and drive shareholder value.

Financial Strength & Profitability

• 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.
• With a favorable trend in its profit margin over the past year, CPRX demonstrates its ability to enhance profitability through efficient operations.
• CPRX has shown positive growth in its free cash flow (FCF) over the past year, indicating improved cash generation and financial strength. This growth highlights the company's ability to effectively manage its cash flows and generate surplus funds.
• The Return on Equity(ROE) of CPRX is 22.52%, which is a strong number. This indicates the company's ability to generate favorable returns for shareholders and reflects its effective management of resources.
• A Debt/Equity ratio of 0.0 highlights CPRX's commitment to maintaining financial stability.

Institutional Confidence & Market Strength

• With institutional shareholders at 83.75%, CPRX demonstrates a healthy ownership distribution. This reflects a mix of institutional and individual investors, creating a market environment that may foster increased trading activity and price discovery.
• CPRX has maintained a healthy Relative Strength (RS) over the analyzed period, with a current 91.54 rating. This demonstrates the stock's ability to outperform its peers and indicates its competitive positioning.

More high growth momentum breakout stocks can be found in our High Growth Momentum Breakout screen.

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.