On Tuesday, Piper Sandler reaffirmed its Overweight rating on Axsome Therapeutics (NASDAQ:AXSM) stock with a steady price target of $115.00. The firm's statement followed a survey of neurologists to assess the market perception of Axsome's AXS-05, also known as Auvelity, for treating agitation in Alzheimer's disease (AD-agitation).
The surveyed neurologists, who manage a significant number of Alzheimer's patients, indicated that AXS-05 is viewed as an effective treatment option with a favorable safety and tolerability profile compared to atypical antipsychotics. This perception is based on the current data available.
The endorsement of AXS-05 by the medical community comes amid the drug's robust performance in treating major depressive disorder. According to data from IQVIA, Auvelity has shown a quarter-to-date sequential growth rate of approximately 28% in the second quarter of 2024 compared to the first quarter of the same year.
Piper Sandler's analysis suggests that the market has yet to fully value the potential of AXS-05 in AD-agitation and other indications in Axsome's pipeline. The firm highlighted that the enterprise value to estimated 2026 EBITDA (EV/2026E EBITDA) ratio stands at around 12 times, which may not fully reflect the drug's prospects.
InvestingPro Insights
In light of Piper Sandler's optimistic outlook on Axsome Therapeutics, current metrics from InvestingPro provide additional context for investors. With a market capitalization of $3.57 billion and a striking gross profit margin of 90.12% for the last twelve months as of Q1 2024, Axsome demonstrates a strong ability to generate revenue over its costs. However, the company's high Price / Book ratio of 24.79 indicates that its stock may be valued richly relative to its net assets.
InvestingPro Tips highlight that while Axsome's liquid assets surpass its short-term obligations, indicating good short-term financial health, analysts have concerns. They have revised their earnings estimates downwards for the upcoming period and do not expect the company to be profitable this year. Additionally, Axsome does not pay a dividend, which may be a consideration for income-focused investors.
For those looking to delve deeper into Axsome's financials and future prospects, InvestingPro offers further analysis and tips. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a comprehensive suite of tools and insights. There are 7 additional InvestingPro Tips available for Axsome, which could provide valuable guidance for investors considering this stock.
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