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Analysts Just Shipped A Substantial Upgrade To Their Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) Estimates

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Celebrations may be in order for Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Catalyst Pharmaceuticals too, with the stock up 14% to US$6.54 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After the upgrade, the four analysts covering Catalyst Pharmaceuticals are now predicting revenues of US$193m in 2022. If met, this would reflect a huge 45% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 59% to US$0.64. Previously, the analysts had been modelling revenues of US$166m and earnings per share (EPS) of US$0.47 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Catalyst Pharmaceuticals


With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.2% to US$10.60 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Catalyst Pharmaceuticals, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$7.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Catalyst Pharmaceuticals' revenue growth is expected to slow, with the forecast 34% annualised growth rate until the end of 2022 being well below the historical 66% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. So it's pretty clear that, while Catalyst Pharmaceuticals' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Catalyst Pharmaceuticals could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Catalyst Pharmaceuticals analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.