Catasys in Solid Position for Growth

Oct. 11, 2017 |  More About Catasys


In early October, financial media outlet Simply Wall St published some misleading and incorrect info on Catasys (NASDAQ: CATS) in what appears to be a bid to scrounge up more subscribers to their services.

By their own admission, the analysis was “fairly basic”, and from our perspective, it shows exactly why a purely quantitative approach in small-caps is a recipe for disaster and missed opportunity.

At the end of the most recently reported period (June 30), CATS had cash of $9.22 million and an accounts receivable balance of $987,000. The operating loss for the six-month period ending June 30 was $4.86 million. This of course is a GAAP number, and doesn’t represent actual cash out the door.

Looking at the cash flow statement, the company used only $3.2 million in operating cash during the first half of the year.

While Simply Wall St attempts to paint a picture that CATS will be “coming to market in the next couple of months” to raise additional funds, the actual numbers and facts seem to indicate otherwise. In fact, if nothing changed for CATS, they have enough operating cash to take them through more than a year of operations.

Further the “analysis” from Simply Wall St fails to factor in growing revenue from the company’s outreach to its growing pool of members, which has grown to 24,000 at the most recent reporting, up several hundred percent versus the end of 2016. With CATS generally enrolling more than 20% of those that it outreaches to, and receiving an average $8,500 per enrolled member, it’s obvious the company is on a growth trajectory that Simply Wall St’s “rear-view mirror” simplistic analysis completely misses.

To learn more about CATS, watch a recent presentation by CEO Terren Peizer.

 

 

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