With EPS Growth And More, Catalyst Pharmaceuticals (NASDAQ:CPRX) Makes An Interesting Case

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It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Catalyst Pharmaceuticals (NASDAQ:CPRX). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Catalyst Pharmaceuticals with the means to add long-term value to shareholders.

Check out our latest analysis for Catalyst Pharmaceuticals

Catalyst Pharmaceuticals' Earnings Per Share Are Growing

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That makes EPS growth an attractive quality for any company. Recognition must be given to the that Catalyst Pharmaceuticals has grown EPS by 44% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The good news is that Catalyst Pharmaceuticals is growing revenues, and EBIT margins improved by 16.0 percentage points to 38%, over the last year. That's great to see, on both counts.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

earnings-and-revenue-history
NasdaqCM:CPRX Earnings and Revenue History November 8th 2024

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Catalyst Pharmaceuticals' forecast profits?

Are Catalyst Pharmaceuticals Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Catalyst Pharmaceuticals insiders have a significant amount of capital invested in the stock. We note that their impressive stake in the company is worth US$161m. Holders should find this level of insider commitment quite encouraging, since it would ensure that the leaders of the company would also experience their success, or failure, with the stock.

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