Catalent Stock Beneish M Score

CTLT Stock  USD 57.98  0.16  0.28%   
This module uses fundamental data of Catalent to approximate the value of its Beneish M Score. Catalent M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Catalent Piotroski F Score and Catalent Altman Z Score analysis.
For more information on how to buy Catalent Stock please use our How to Invest in Catalent guide.
  
At this time, Catalent's Debt Current is comparatively stable as compared to the past year. Issuance Repayment of Debt Securities is likely to gain to about 601.8 M in 2024, whereas Total Debt is likely to drop slightly above 4.6 B in 2024. At this time, Catalent's Cash Flow Per Share is comparatively stable as compared to the past year. Revenue to Assets is likely to gain to 0.54 in 2024, whereas Return on Investment is likely to drop (2.08) in 2024.
At this time, it appears that Catalent is an unlikely manipulator. The earnings manipulation may begin if Catalent's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Catalent executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Catalent's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.89
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

1.0

Focus
Asset Quality

0.68

Focus
Expense Coverage

0.98

Focus
Gross Margin Strengs

1.14

Focus
Accruals Factor

0.98

Focus
Depreciation Resistance

1.32

Focus
Net Sales Growth

0.85

Focus
Financial Leverage Condition

1.05

Focus

Catalent Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Catalent's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Selling General and Administrative Expense801.1 M953.4 M
Fairly Down
Slightly volatile
Revenues4.2 B4.9 B
Fairly Down
Slightly volatile
Trade and Non Trade Receivables984.9 M1.2 B
Fairly Down
Slightly volatile
Property Plant and Equipment Net4.6 B4.2 B
Significantly Up
Slightly volatile
Operating Income(192.4 M)(187.4 M)
Fairly Down
Pretty Stable
Net Cash Flow from Operations318.5 M292.1 M
Significantly Up
Slightly volatile
Liabilities Non Current4.6 B5.3 B
Fairly Down
Slightly volatile
Current Liabilities1.9 B1.8 B
Significantly Up
Slightly volatile
Total LiabilitiesB7.1 B
Fairly Down
Slightly volatile
Investments Current100.2 M102.3 M
Fairly Down
Slightly volatile
Investments100.2 M102.3 M
Fairly Down
Slightly volatile
Gross Margin0.250.22
Moderately Up
Slightly volatile
Depreciation Amortization and Accretion386.2 M485.3 M
Significantly Down
Slightly volatile
Debt Non Current4.3 BB
Fairly Down
Slightly volatile
Debt Current665.1 M616.4 M
Significantly Up
Slightly volatile
Total Debt4.6 B5.6 B
Significantly Down
Slightly volatile
Assets Non Current7.4 B9.3 B
Significantly Down
Slightly volatile
Current Assets2.5 B3.1 B
Significantly Down
Slightly volatile
Total Assets9.9 B12.4 B
Significantly Down
Slightly volatile

Catalent Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Catalent's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Catalent in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Catalent's degree of accounting gimmicks and manipulations.

About Catalent Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation Amortization and Accretion

386.22 Million

At this time, Catalent's Depreciation Amortization and Accretion is comparatively stable as compared to the past year.

Catalent Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Catalent. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Revenues3.1B4.0B4.8B4.3B4.9B4.2B
Total Assets7.8B9.1B10.5B10.8B12.4B9.9B
Current Assets2.3B2.9B2.9B2.7B3.1B2.5B
Assets Non Current5.5B6.2B7.6B8.1B9.3B7.4B
Total Liabilities4.3B4.8B5.7B6.2B7.1B6.0B
Current Liabilities893M1.2B1.1B1.5B1.8B1.9B
Total Debt3.0B3.2B4.2B4.8B5.6B4.6B
Debt Current73M75M31M536M616.4M665.1M
Debt Non Current2.9B3.2B4.2B4.3B5.0B4.3B
Operating Income395M646M729M(163M)(187.5M)(192.4M)

About Catalent Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Catalent's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Catalent using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Catalent based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Catalent, Inc., together with its subsidiaries, develops and manufactures solutions for drugs, protein-based biologics, cell and gene therapies, and consumer health products worldwide. The company was incorporated in 2007 and is headquartered in Somerset, New Jersey. Catalent operates under Drug ManufacturersSpecialty Generic classification in the United States and is traded on New York Stock Exchange. It employs 19000 people.

Pair Trading with Catalent

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Catalent position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Catalent will appreciate offsetting losses from the drop in the long position's value.

Moving against Catalent Stock

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The ability to find closely correlated positions to Catalent could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Catalent when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Catalent - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Catalent to buy it.
The correlation of Catalent is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Catalent moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Catalent moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Catalent can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
When determining whether Catalent is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Catalent Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Catalent Stock. Highlighted below are key reports to facilitate an investment decision about Catalent Stock:
Check out Catalent Piotroski F Score and Catalent Altman Z Score analysis.
For more information on how to buy Catalent Stock please use our How to Invest in Catalent guide.
You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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When running Catalent's price analysis, check to measure Catalent's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Catalent is operating at the current time. Most of Catalent's value examination focuses on studying past and present price action to predict the probability of Catalent's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Catalent's price. Additionally, you may evaluate how the addition of Catalent to your portfolios can decrease your overall portfolio volatility.
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Is Catalent's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Catalent. If investors know Catalent will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Catalent listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.15)
Earnings Share
(7.18)
Revenue Per Share
22.623
Quarterly Revenue Growth
(0.10)
Return On Assets
(0.01)
The market value of Catalent is measured differently than its book value, which is the value of Catalent that is recorded on the company's balance sheet. Investors also form their own opinion of Catalent's value that differs from its market value or its book value, called intrinsic value, which is Catalent's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Catalent's market value can be influenced by many factors that don't directly affect Catalent's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Catalent's value and its price as these two are different measures arrived at by different means. Investors typically determine if Catalent is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Catalent's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.