What’s there in Conatus Pharmaceuticals Inc. (NASDAQ:CNAT)’s new trend?


Conatus Pharmaceuticals Inc. (NASDAQ:CNAT) shares closed down 21.51% on Thursday after the company announced a public offering of its stock. The biotech company, which focuses on novel medicines that can treat liver disease, priced an underwritten public offering of 5,200,000 shares of its common stock at $5.50 per share to the public. When all is said and done, gross proceeds, excluding underwriting discounts and commissions as well as estimated offering costs, would create $28.6 million. Conatus has already said it would use $16.7 million of the funds to fund pipeline expansion and for working capital. Last Thursday, the company had reported a loss of 14 cents for the first quarter. This was in line with the Zack’s consensus. While the company has no approved products, it recognized collaboration revenue at $7 million beating the $5.9 million estimate of five analysts surveyed by Zacks.

Conatus Pharmaceuticals Inc. (NASDAQ:CNAT), whose P/Free Cash Flow calculates to 5.62.

The company reported EPS of $-1.31 in the last fiscal year. Its next earnings report is expected on Earnings Date May 04/b.

The Barchart Technical Opinion rating is a 24% Sell with a Average short term outlook on maintaining the current direction. Longer term, the trend strength is Weak. The market is in highly oversold territory. Beware of a trend reversal.

For this year, EPS is expected to improve -1.20% over the previous year’s EPS. The company has seen its EPS move EPS growth past 5 years 35.60% over the last five years, and for the next five years EPS movement is expected to be 38.00%.

What value is Conatus Pharmaceuticals Inc. generating for shareholders? The company’s return on assets for the trailing 12 months calculates to -64.80%, return investments for the same period comes to -130.80% and return on equity comes to -108.90%.

Can Conatus Pharmaceuticals Inc. cope with its near-term financial needs to continue generating value for shareholders. A look at the company’s liquidity ratio shows it has current ratio of 2.00. For perspective, current ratio above 2 is considered healthy for a company as it implies the company can meet its near-term financial needs. Conatus Pharmaceuticals Inc.’s quick ratio on the other hand comes to 2.00. Once again, quick ratio of at least 1 is considered healthy for a company and quick ratio below 1 can be toxic to a company’s future.

As for other ratios worth keeping in mind, Conatus Pharmaceuticals Inc.’s Long Term Debt/Equity is 0.00 and Total Debt/Equity is 0.05.

Conatus Pharmaceuticals Inc. has mixed ownership if that means participation of insiders and outside institutional investors in the stock. Insider ownership of the company is 0.30% while institutional ownership is 29.90%.

Investors would do well to remember that of Conatus Pharmaceuticals Inc.’s 27.45M outstanding shares, 25.30M are free float. Of the floating shares, short float is 3.14%, which calculates to short ratio of 0.94.