Strength Seen in Catalyst (CPRX): Can Its 9.2% Jump Turn into More Strength?

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Catalyst Pharmaceutical CPRX shares ended the last trading session 9.2% higher at $16.12. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock’s 22.4% loss over the past four weeks.

This surge was most likely attributable to the recovery of the share price after they dived last week when CPRX announced that it has received a notice letter stating that Teva Pharmaceuticals filed an abbreviated new drug application (“ANDA”) to the FDA for a generic version of Firdapse, Catalyst’s sole marketed drug.

This specialty drug company is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of +122.2%. Revenues are expected to be $56.61 million, up 47.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Catalyst, the consensus EPS estimate for the quarter has been revised 23.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CPRX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

Catalyst is a member of the Zacks Medical – Drugs industry. One other stock in the same industry, Jazz Pharmaceuticals JAZZ, finished the last trading session 1.5% lower at $153.15. JAZZ has returned -1.1% over the past month.

For Jazz, the consensus EPS estimate for the upcoming report has changed -5.4% over the past month to $4.43. This represents a change of +5.2% from what the company reported a year ago. Jazz currently has a Zacks Rank of #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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