|
Related Topics
|
Category: Stock Market and Catalent
Date: 6 November 2019 Stock Price: $50.43 We take a look at the latest earnings report from Catalent, the advanced technologies and development solutions for drugs and biologics firm for the 1st quarter of their 2020 fiscal year.
|
About Catalent
Catalent, Inc. is the leading global provider of advanced delivery technologies and development solutions for drugs, biologics and consumer health products. With over 80 years serving the industry, Catalent has proven expertise in bringing more customer products to market faster, enhancing product performance and ensuring reliable clinical and commercial product supply. Catalent employs over 11,000 people, including over 1,400 scientists, at more than 30 facilities across five continents, and in fiscal 2017 generated over $2 billion in annual revenue.
Financial overview of Catalent's 1st quarter 2020 earnings report
Data below refers to the latest quarter's data unless specified otherwise
- Net revenues: $664.7 million (up from $551.8 million for the same quarter of the previous year)
- Net revenues increased by 20.4% over the last 12 months
- Cost of sales: $487 million (up from $403.3 million for the same quarter of the previous year)
- Cost of sales increased by 20.7% over the last 12 months
- Net loss: -$8 million (up from a loss of -$14.4 million for the same quarter of the previous year)
- Loss per share: -$0.05 (up from a loss of -$0.10 for the same quarter of the previous year)
- Diluted number of shares in issue: 145.7 million (up from 142.1 million for the same quarter of the previous year)
- Cash and cash equivalents: $243.4 million
- Cash and cash equivalents per share: $1.67
- Cash and cash equivalents makes up 3.3% of Catalent's market capital
- Cash and cash equivalents makes up 3.9% of Catalent's total assets
- Trade receivables: $647.9 million
- Trade receivables makes up 10.5% of Catalent's total assets
- Stockholders equity in Catalent: $1.649 billion
- Stockholders equity per share: $11.31
- Catalent is trading at 4.46 times its stockholders equity per share which is just outside the expected range of between 2 and 4 times that most firms tend to trade at
- Cash generated from operations: $25.2 million
- Cash generated from operations per share: $0.17
Catalent management commentary on their 1st quarter 2020 earnings and earnings guidance
SOMERSET, N.J.--(BUSINESS WIRE)--Catalent, Inc. (NYSE:CTLT), the leading global provider of advanced delivery technologies, development, and manufacturing solutions for drugs, biologics, gene therapies, and consumer health products, today announced financial results for the first quarter of fiscal year 2020, which ended September 30, 2019.
“Our financial performance for the first quarter was aligned with our expectations and provides a strong start to our fiscal year 2020,” said John Chiminski, Chair and Chief Executive Officer of Catalent, Inc. “We continue to benefit from the robust market demand within the CDMO industry, our leadership position, and the recent investments within Biologics, including gene therapy. Our May 2019 acquisition of viral vector developer and manufacturer Paragon Bioservices has already begun to accelerate Catalent’s financial growth and is creating substantial value for our customers, patients, and shareholders.”
“Our financial performance for the first quarter was aligned with our expectations and provides a strong start to our fiscal year 2020,” said John Chiminski, Chair and Chief Executive Officer of Catalent, Inc. “We continue to benefit from the robust market demand within the CDMO industry, our leadership position, and the recent investments within Biologics, including gene therapy. Our May 2019 acquisition of viral vector developer and manufacturer Paragon Bioservices has already begun to accelerate Catalent’s financial growth and is creating substantial value for our customers, patients, and shareholders.”
Balance Sheet and Liquidity
As of September 30, 2019, Catalent had $2.9 billion in total debt, and $2.7 billion in total debt net of cash and short-term investments, which is closely aligned with the net debt as of June 30, 2019. Catalent’s total net leverage ratio as of September 30, 2019 was 4.3x. On a pro forma basis for the May 2019 Paragon Bioservices acquisition, Catalent’s total net leverage ratio as of September 30, 2019 would have been 4.2x; an improvement compared to the pro forma total net leverage ratio of 4.5x as of the time of the announcement of the Paragon acquisition.
Fiscal Year 2020 Outlook
Management is reaffirming its previously issued financial guidance. For fiscal 2020, the Company expects revenue in the range of $2.78 billion to $2.88 billion. Catalent expects Adjusted EBITDA in the range of $700 million to $730 million and Adjusted Net Income in the range of $300 million to $330 million. The Company expects a fully diluted share count in the range of 159 million to 160 million shares on a weighted-average basis, counting the Series A preferred shares as-if converted.
As of September 30, 2019, Catalent had $2.9 billion in total debt, and $2.7 billion in total debt net of cash and short-term investments, which is closely aligned with the net debt as of June 30, 2019. Catalent’s total net leverage ratio as of September 30, 2019 was 4.3x. On a pro forma basis for the May 2019 Paragon Bioservices acquisition, Catalent’s total net leverage ratio as of September 30, 2019 would have been 4.2x; an improvement compared to the pro forma total net leverage ratio of 4.5x as of the time of the announcement of the Paragon acquisition.
Fiscal Year 2020 Outlook
Management is reaffirming its previously issued financial guidance. For fiscal 2020, the Company expects revenue in the range of $2.78 billion to $2.88 billion. Catalent expects Adjusted EBITDA in the range of $700 million to $730 million and Adjusted Net Income in the range of $300 million to $330 million. The Company expects a fully diluted share count in the range of 159 million to 160 million shares on a weighted-average basis, counting the Series A preferred shares as-if converted.
Catalent's company (NYSE: CTLT) stock price history
The image below, obtained from Google, shows the stock price history of Catalent over the last 5 years. And its been a good old time for Catalent investors over the last 5 years. 5 years ago Catalent stock was trading at around $24.80 a share and its currently trading at $50.43 a share. That's a very healthy return of 103% provided to stockholders of Catalent over the last 5 years.
The stock of Catalent is trading at a lot closer to its 52 week high of $58.28 than it is to its 52 week low of $29.23 which to us is a clear indication that the short term momentum and sentiment of Catalent stock is very positive.
The stock of Catalent is trading at a lot closer to its 52 week high of $58.28 than it is to its 52 week low of $29.23 which to us is a clear indication that the short term momentum and sentiment of Catalent stock is very positive.
Recent coverage of Catalent
The extract below discusses Catalent latest earnings report as obtained from Zacks.com
Catalent (CTLT - Free Report) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.24 per share. This compares to earnings of $0.28 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 8.33%. A quarter ago, it was expected that this maker of drug delivery technologies would post earnings of $0.64 per share when it actually produced earnings of $0.70, delivering a surprise of 9.38%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times. Catalent, which belongs to the Zacks Medical - Drugs industry, posted revenues of $664.70 million for the quarter ended September 2019, surpassing the Zacks Consensus Estimate by 4.45%. This compares to year-ago revenues of $551.80 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Catalent shares have added about 61.1% since the beginning of the year versus the S&P 500's gain of 22.8%.
Read the full article here
Catalent (CTLT - Free Report) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.24 per share. This compares to earnings of $0.28 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 8.33%. A quarter ago, it was expected that this maker of drug delivery technologies would post earnings of $0.64 per share when it actually produced earnings of $0.70, delivering a surprise of 9.38%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times. Catalent, which belongs to the Zacks Medical - Drugs industry, posted revenues of $664.70 million for the quarter ended September 2019, surpassing the Zacks Consensus Estimate by 4.45%. This compares to year-ago revenues of $551.80 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Catalent shares have added about 61.1% since the beginning of the year versus the S&P 500's gain of 22.8%.
Read the full article here
Catalent's (NYSE: CTLT) stock valuation
Based on Catalent's latest earnings report and their fiscal guidance provided what do we value their stock at? Based on the earnings reported and the fiscal guidance provided our valuation model provides a target (full value) price for Catalent stock at $46.90 a stock (up slightly from our 4th quarter 2019 earnings valuation of Catalent). We therefore believe that stock of Catalent is overvalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $46.90. We therefore believe a good entry point into the stock of Catalent is at $42.20 or below. We expect that stock of Catalent to pull back from current levels to levels closer to our target (full value) price in coming weeks and months.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $46.90. We therefore believe a good entry point into the stock of Catalent is at $42.20 or below. We expect that stock of Catalent to pull back from current levels to levels closer to our target (full value) price in coming weeks and months.
Next earnings release of Catalent
It is expected that Catalent's 2nd quarter 2020 earnings report will be released in early February 2020