bunch of white oval medication tablets and white medication capsules

Q1 Earnings Preview for Catalent (NYSE:CTLT)

in EARNINGS/INVESTING IDEAS by

Catalent, Inc. (NYSE:CTLT) is scheduled to report Q1 earnings results before markets open for trading on November 3, 2020.

The company is expected to report earnings of $0.37/share on revenue of $812.9 million. The consensus earnings per share (EPS) of $0.37/share is based on a poll of 12 analysts and represents a growth in eps of 40.6% over the same quarter last year, when the company reported earnings of $0.26/share.

The revenue forecast of $812.9 million based on a poll of 11 analysts implies a year-over-year (YoY) growth in revenue of 22.3%. Last year the company reported $664.7 million in revenue for the quarter.

Expected to report EPS growth of 40.6% for Q1, 2021
Metric Expected Prior Year YoY Change
Revenue $812.87 $664.70 22.3%
EPS $0.37 $0.26 40.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and met expectations 2 quarters.

What are your expectations from Catalent, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2020 $0.77 $0.90 16.9% Beat
Q3, 2020 $0.49 $0.50 3.0% Beat
Q2, 2020 $0.45 $0.45 0% Met
Q1, 2020 $0.23 $0.26 13.3% Beat
Q4, 2019 $0.66 $0.70 6.0% Beat
Q3, 2019 $0.46 $0.49 6.9% Beat
Q2, 2019 $0.37 $0.45 21.8% Beat
Q1, 2019 $0.28 $0.28 0% Met

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 3.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 31, 2020 $87.66 $90.68 3.4% Increase
May 5, 2020 $66.56 $71.61 7.6% Increase
February 3, 2020 $61.10 $59.47 −2.7% Decline
November 5, 2019 $50.22 $49.12 −2.2% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.40, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.40 implies a 0.8% chance of earnings manipulation.

Fundamentals And Technical Analysis

Catalent, Inc. is currently trading at $89.73/share, down −1.9% for the day. The company is trading at approximately 92.9% of its 52-week high of $96.38/share. The company’s stock price is down −1.0% since the last earnings report and down −2.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 54.83 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:CTLT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 84.91 and a forward P/E multiple of 35.93.

Catalent, Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.07. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q4
Period End Date June 30, 2020
Stock Price (Current) $89.73
P/E Ratio 84.9x
P/E Ratio (Fwd) 35.9x
PEG Ratio 3.3
Total Debt / Total Capital 16.6%
Levered Free Cash Flow -$25.5 million
EV / EBITDA 26.3x

Finbox

Catalent, Inc. is a large-cap stock with a market capitalization of $15.051 billion and a total enterprise value of $17.829 billion. The company operates in the Healthcare sector and the Pharmaceuticals industry.

Catalent, Inc., together with its subsidiaries, provides delivery technologies and development solutions for drugs, biologics, and consumer and animal health products worldwide. It operates through four segments: Softgel and Oral Technologies, Biologics, Oral and Specialty Delivery, and Clinical Supply Services. The Softgel and Oral Technologies segment provides formulation, development, and manufacturing services for soft capsules for use in a range of customer products, such as prescription drugs, over-the-counter medications, dietary supplements, unit-dose cosmetics, and animal health medicinal preparations. The Biologics segment provides biologic cell-line; develops and manufactures cell therapy and viral vector gene therapy; formulation, development, and manufacturing for parenteral dose forms, including prefilled syringes, vials, and cartridges; and analytical development and testing services. The Oral and Specialty Delivery segment offers formulation, development, and manufacturing across a range of technologies along with integrated downstream clinical development and commercial supply solutions. This segment also offers oral delivery solutions platform comprising pre-clinical screening, formulation, analytical development, and current good manufacturing practices services. The Clinical Supply Services segment offers manufacturing, packaging, storage, distribution, and inventory management for drugs and biologics clinical trials. It also offers FastChain demand-led clinical supply services. The company serves pharmaceutical, biotechnology, and consumer health companies; and companies in other healthcare market segments, such as animal health and medical devices, as well as in cosmetics industries. It has a collaboration with the Janssen Pharmaceutical Companies; Arcturus Therapeutics Holdings Inc.; and BrainStorm Cell Therapeutics Inc. Catalent, Inc. was founded in 2007 and is headquartered in Somerset, New Jersey.

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