Kala Pharmaceuticals currently holds roughly 44.57
M in cash with (108.23
M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 30.44, which can makes it an attractive takeover target, given it will continue generating positive cash flow.
Investing in Kala Pharmaceuticals, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Kala Pharmaceuticals along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
How important is Kala Pharmaceuticals's Liquidity
Kala Pharmaceuticals
financial leverage refers to using borrowed capital as a funding source to finance Kala Pharmaceuticals ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Kala Pharmaceuticals financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Kala Pharmaceuticals' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Kala Pharmaceuticals' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Kala Pharmaceuticals's total debt and its cash.
Kala Pharmaceuticals Gross Profit
Kala Pharmaceuticals Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Kala Pharmaceuticals previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Kala Pharmaceuticals Gross Profit growth over the last 10 years. Please check Kala Pharmaceuticals'
gross profit and other
fundamental indicators for more details.
Kala Pharmaceuticals Correlation with Peers
Investors in Kala can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Kala Pharmaceuticals. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Kala Pharmaceuticals and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Kala is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Kala for more details
An Additional Perspective On Kala Pharmaceuticals
Kala Pharmaceuticals is dangerous given 3 months investment horizon.
Kala Pharmaceuticals has Sharpe Ratio of 0.0721, which conveys that the firm had 0.0721% of return per unit of risk over the last 3 months. Our standpoint towards estimating the volatility of a stock is to use
Kala Pharmaceuticals market data together with company specific
technical indicators. We were able to break down and interpolate twenty-six different
technical indicators, which can help you to evaluate if expected returns of 2.06% are justified by taking the suggested risk. Use Kala Pharmaceuticals Mean Deviation of 8.45,
risk adjusted performance of 0.0985, and Downside Deviation of 6.43 to evaluate company specific risk that cannot be
diversified away.
Will Kala Pharmaceuticals slide back before January?
Downside deviation is down to 6.43. It may suggest a possible volatility slip. Kala Pharmaceuticals is displaying above-average volatility over the selected time horizon. Investors should scrutinize Kala Pharmaceuticals independently to ensure intended market timing strategies are aligned with expectations about Kala Pharmaceuticals volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Kala Pharmaceuticals' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Kala Pharmaceuticals' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Bottom Line On Kala Pharmaceuticals
Whereas many other companies within the drug manufacturers—specialty & generic industry are still a little expensive, even after the recent corrections, Kala Pharmaceuticals may offer a potential longer-term growth to investors. To summarize, as of the 29th of December 2022, we believe that at this point, Kala Pharmaceuticals is
overvalued with
high chance of financial distress within the next 2 years. Our primary 'Buy-vs-Sell' recommendation on the company is
Cautious Hold.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile 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 Kala Pharmaceuticals. Please refer to our
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