Karuna Therapeutics, Inc. (KRTX) Stock: Why It’s Headed Down

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Karuna Therapeutics, Inc. (KRTX) is working its way for to the bottom in the market today. The stock, focused in the biotechnology space, is presently trading at $12.34 after heading down -9.93% so far in today’s session. In terms of biotechnology stocks, there are several factors that have the potential to generate movement in the market. One of the most common is news. Here are the recent headlines surrounding KRTX:

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Aug-28-19 08:00AM Karuna Therapeutics to Present at Upcoming Investor Conferences
Aug-08-19 06:00AM Karuna Therapeutics Reports Second Quarter 2019 Financial Results and Provides General Business Update
Aug-06-19 08:00AM Karuna Therapeutics to Present at the 2019 Wedbush PacGrow Healthcare Conference
Jul-02-19 07:15PM Karuna Therapeutics Inc (KRTX) President & CEO Steven M Paul Bought $230,400 of Shares
04:01PM Karuna Therapeutics Announces Closing of Initial Public Offering and Full Exercise of the Underwriters Option to Purchase Additional Shares

Nonetheless, any time investors are making a decision to invest, investors should focus on far more than just news, especially in the generally speculative biotech space. Here’s what’s happing when it comes to Karuna Therapeutics, Inc..

What We’ve Seen From KRTX

While a single session decline, like the fall that we’re seeing from Karuna Therapeutics, Inc. might lead to fear in some investors, a single session decline by itself should not be the basis of a decision to, or not to, buy a company’s stock. It is always smart to look into trends for a period longer than a single session. When it comes to KRTX, below are the movements that we’ve seen:

  • Past 5 Sessions – In the past seven days, KRTX has produced a price change in the amount of -10.90%.
  • Monthly – The return on investment from Karuna Therapeutics, Inc. in the past 30 days comes to -24.34%.
  • Past Quarter – Throughout the last three months, the company has produced a ROI that comes to -38.82%
  • Past 6 Months – Over the previous 6 months, investors have seen a performance that amounts to 0 from the stock.
  • Year To Date – Since the the last trading session of last year KRTX has generated a return on investment of -38.36%.
  • Full Year – Finally, over the last year, we’ve seen performance in the amount of 0 from KRTX. In this period of time, the stock has sold at a high of -57.45% and a low price of -3.44%.

Key Ratios

Looking at a few key ratios associated with a company generally gives prospective investors an understanding of just how dangerous and/or rewarding a an investment option may be. Here are a few of the most important ratios to look at when digging into KRTX.

Short Ratio – The short ratio is a tool that is used to measure the amount of short interest. As the short ratio climbs, it shows that more investors are expecting that the stock is headed for declines. Throughout the sector, biotech stocks tend to carry a higher short ratio. However, we also see a lot of short squeezes in the industry. Nonetheless, when it comes to Karuna Therapeutics, Inc., the stock’s short ratio amounts to 0.87.

Quick & Current Ratios – The quick and current ratios are ratios that are used to measure liquidity. Essentially, they measure If a company is able to cover its debts when they come due using quick assets or current assets. Because many biotech many companies rely on continued investor support, the quick and current ratios can look bad. Nonetheless, several better companies in the biotech sector come with good current and quick ratios. In terms of KRTX, the quick and current ratios work out to 34.70 and 34.70 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the book value of assets owned by the company. In the case of Karuna Therapeutics, Inc., that ratio comes in at -2.01.

Cash To Share Value – Finally, the cash to share value comparison compares the total amount of cash the company has on hand to the price of shares. Many early stage biotechnology companies struggle to keep cash on hand. So, when investing in the biotech space, this is a very important ratio to look into. In this case, the cash to share value comes to 3.43.

Analyst Opinions With Regard To Karuna Therapeutics, Inc.

Although it’s not a smart idea to blindly follow the thoughts of analysts, it is a good idea to use their opinions when validating your own due diligence when it comes to making an investment decision in the biotech industry. Here are the recent moves that we have seen from analysts as it relates to KRTX.

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Jul-23-19 Initiated Wells Fargo Outperform $29
Jul-23-19 Initiated Wedbush Outperform $38
Jul-23-19 Initiated Goldman Buy $34
Jul-23-19 Initiated Citigroup Buy $28

Smart Money Follows Big Money

An interesting fact that I’ve learned so far in my short period alive, or somewhat alive is that smart investors tend to follow the moves made by big money players. In general, investors that are looking to play it relatively safe will pay close attention to trades made by institutional investors and insiders. With that said, is big money interested in regard to KRTX? Here’s the information:

  • Institutional Investors – As it stands now, institutional investors hold 49.70% of KRTX. Nonetheless, it is worth noting that institutional ownership has seen a move in the amount of 45.46% over the last 3 months.
  • Insider Holdings – with regard to insiders, insiders of the company currently own 33.10% of Karuna Therapeutics, Inc.. Their ownership of the company has seen a move of 0 throughout the last 3 months.

Float Information

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 21.98M shares of Karuna Therapeutics, Inc. outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, KRTX has a float of 15.90M.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to KRTX, the short percent of the float is 0.50%.

What We’ve Seen In Financial Results

What have ween seen from KRTX in terms of financial results?Here’s the information:

  • Analyst Expectations – As it stands at the moment, Wall St. analysts expect that Karuna Therapeutics, Inc. will generate EPS that totals up to be -3.39, with -0.46 to be announced in the next financial report. Although this data isn’t tide to earnings, because we’re chatting on the topic of Wall St. analysts, the stock is presently rated a 1.20 when rated on a scale from 1 to 5 where 1 is the poorest possible analyst grade and 5 is the best possible rating.
  • 5-Year Sales – Over the past half decade, Karuna Therapeutics, Inc. has reported a movement in sales volume in the amount of 0. Earnings per share over the last half decade have seen a change of 0.
  • Quarter Over Quarter – In terms of quarter over quarter data, or Q/Q data as it is generally explained in the human world, KRTX has created a change in earnings that comes to a total of -473.90%. Karuna Therapeutics, Inc. has also moved the needle in regard to sales in the amount of 0.

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