Pharma Stock's Earnings Impress Investors; Is It A Buy Now?

Catalyst's stock shot up after their sales for 2023 were forecasted to be higher than what analysts had originally predicted.

Pharma Stock's Earnings Impress Investors; Is It A Buy Now?

After Catalyst Pharmaceuticals (CPRX), reported earnings that exceeded analysts' expectations, the stock is trying to rebound.

The stock suffered a significant pullback in January but shares were able to regain their 21-day exponential moving mean after the March 15 earnings reports. However, shares are facing resistance at the 50 day moving average. Despite this setback, the stock seems to be building a new base.

Pharma Stock to Watch: Catalyst's Products

Two key products are available from the company: Firdapse which treats Lambert-Eaton myasthenic Syndrome and Fycompa, an anti-seizure medication.

According to the company's most recent earnings report, it projected that its two products would generate sales of $375 million to 385 million for 2023. This was higher than the estimates of FactSet analysts who forecast only $357.1 million in sales.

Shares rose nearly 10% after the earnings announcement. Catalyst's adjusted earnings rose 138% to cents per share, while the strict as-reported income increased 144%. MarketSmith reports that sales rose 59% to $60.9million.

Catalyst's Firdapse competitor was eliminated from the market last year, which helped boost sales. Catalyst Chief Executive Patrick McEnany stated that he believes the company is poised for another record-breaking year of sustained growth in 2023 in prepared remarks in connection with the latest earnings report.

The company is ranked No. The company holds the No. 1 ranking among its peers in IBD’s biotech industry group. It is currently ranked 39th among the 197 groups IBD measures. The group also holds a Group RS Rating A.

Chart Analysis: New Base for Stock

The stock fell nearly 30% on Jan. 23 and moved below the 50-day mark in heavy volume. The company announced that Teva Pharmaceutical, an Israeli-based drugmaker, was planning to create a generic Firdapse.

Since then, shares have been consolidating and are still above the 200-day moving mean. Although it is too early to determine a buy point, the stock could be starting to form a new base.

Fund ownership increased to 430 funds in the December-ended quarter from 320 funds a year earlier.