Karuna Story

<div class='circular--portrait' style='background:#800000;color: #F8F8FF;font-size:4em;'>KT</div>
KRTX -- USA Stock  

USD 78.97  1.87  2.43%

In spite of fairly strong basic indicators, Karuna Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to a short-term swings for the investors. Karuna Therapeutics chance of financial distress is under 29 percent. Will Karuna Therapeutics investors continue to buy in September?
Published over a month ago
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Are investors happy with Karuna Therapeutics (NASDAQ:KRTX) basic indicators?
We consider Karuna Therapeutics very steady. Karuna Therapeutics has Sharpe Ratio of 0.0022, which conveys that the firm had 0.0022% of return per unit of risk over the last month. Our standpoint towards estimating the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Karuna Therapeutics, which you can use to evaluate future volatility of the firm. Please verify Karuna Therapeutics Mean Deviation of 2.88, downside deviation of 3.56, and Risk Adjusted Performance of 0.0184 to check out if the risk estimate we provide is consistent with the expected return of 0.0074%.
Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Karuna Therapeutics income statement, its balance sheet, and the statement of cash flows. Potential Karuna Therapeutics investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Karuna Therapeutics investors may use each financial statement separately, they are all related. The changes in Karuna Therapeutics's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Karuna Therapeutics's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages. The goal of Karuna Therapeutics fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Karuna Therapeutics performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Karuna Therapeutics shares is the value that is considered the true value of the share. If the intrinsic value Karuna is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Karuna Therapeutics. Please read more on our fundamental analysis page.

Are Karuna Therapeutics Earnings Expected to grow?

The future earnings power of Karuna Therapeutics involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Karuna Therapeutics factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Karuna Therapeutics stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Karuna expected earnings.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Karuna Therapeutics, but it might be worth checking our own buy vs. sell analysis

Exercise or conversion by Pande Atul of 5000 shares of Karuna Therapeutics subject to Rule 16b-3

Legal trades by Karuna Therapeutics insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Karuna insider trading alert for exercise of option (right to buy) by Pande Atul, the corporate stakeholder, on 18th of September 2020. This event was filed by Karuna Therapeutics Inc with SEC on 2020-09-18. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down a bit more

Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Karuna Therapeutics is not uncomon. Many companies such as Karuna Therapeutics have both institutions investors and insiders sharing the ownership. Retail investors typically buy and sell stocks in round lots of 100 shares or more. Other other hand institutional investors are known to buy and sell in block trades of 10,000 shares or more. Let's take a look at how the ownership of Karuna is distributed among investors.

Ownership Allocation

Karuna Therapeutics maintains a total of twenty-six million six hundred twenty thousand outstanding shares. Over half of Karuna Therapeutics outstanding shares are owned by institutional investors. These institutional investors are typically referred to corporate investors that shop for positions in a given instrument to benefit from reduced trade commissions. Consequently, these institutions are subject to different rules and regulation than regular investors in Karuna Therapeutics. Please watch out for any change in the institutional holdings of Karuna Therapeutics as this could mean something significant has changed or about to change at the company. Please note that no matter how much assets the company has, if the real value of the firm is less than the current market value, you may not be able to make money on it.

Retail Investors
15.3%
Insiders
21.17%
Institutions
63.53%
Retail Investors15.3
Insiders21.17
Institutions63.53

Asset Utilization

One of the ways to look at asset utilization of Karuna is to check how much profit was generated for every dollar of assets it reports. Karuna Therapeutics secures a negative usage of assets of -12.75 %, losing $0.13 for each dollar of assets held by the firm. Inadequate asset utilization conveys that the company is being less effective with each dollar of assets it secures. Strictly speaking, asset utilization of Karuna Therapeutics shows how discouraging it operates for each dollar spent on its assets.

Current Assets
423.7 M
Current Assets423.71 Million99.93
Assets Non Current281,4210.0664

Our Karuna analysis suggests possible reversion in September

Current Risk Adjusted Performance is up to 0.02. Price may slide again. Karuna Therapeutics shows above-average downside volatility for the selected time horizon. We advise investors to inspect Karuna Therapeutics further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Karuna Therapeutics future alpha.

Our Takeaway on Karuna Therapeutics Investment

While some other entities in the biotechnology industry are either recovering or due for a correction, Karuna Therapeutics may not be performing as strong as the other in terms of long-term growth potentials. To summarize, as of the 22nd of August 2020, our research shows that Karuna Therapeutics is a rather very steady investment opportunity with a below average chance of financial distress in the next two years. From a slightly different view, the entity currently appears to be undervalued. However, our actual 30 days buy-or-sell advice on the company is Strong Sell.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Karuna Therapeutics. Please refer to our Terms of Use for any information regarding our disclosure principles.

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