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Wednesday, H.C. Wainwright analysts lowered the price target on Axsome Therapeutics (NASDAQ:AXSM) shares to $180 from $200, maintaining a Buy rating despite first quarter financial results that fell short of expectations. Axsome’s revenue for the quarter was reported at $121.5 million, below the forecasted $130.3 million, and the net loss per diluted share was $1.22, compared to the anticipated $1.06. The company, currently valued at $5.5 billion, has shown impressive revenue growth of 72% over the last twelve months. InvestingPro data reveals that five analysts have recently revised their earnings estimates upward for the upcoming period, suggesting potential improvement ahead.
The analysts noted that the operating expenses for Axsome, particularly sales, general, and administrative (SG&A) spending, were higher than expected, amounting to $120.8 million against a forecast of $115 million. Consequently, the full-year revenue forecast for 2025 has been revised down to $626.3 million from $662.8 million, and the 2026 estimate is now $1.08 billion, reduced from $1.27 billion.
The increase in spending is attributed to the aggressive sales and marketing efforts as Axsome prepares to launch SYMBRAVO for the acute treatment of migraines in adults next month. The company’s financial position remained robust, with $300.9 million in cash and equivalents at the end of the first quarter and a healthy current ratio of 2.03. The firm anticipates that this capital will be adequate to support operations until Axsome reaches cash flow positivity, which is expected early next year. For deeper insights into Axsome’s financial health and growth prospects, InvestingPro offers comprehensive analysis through its exclusive Pro Research Report, available along with 8 additional ProTips.
The optimism from H.C. Wainwright is partly based on Axsome’s positive topline results from the EMERGE Phase 3 open-label trial of SYMBRAVO. The drug demonstrated a statistically significant improvement in treating migraines compared to prior oral CGRP inhibitors. Following adjustments to long-term forecasts for several of Axsome’s key products and a reduction in the discount rate to 10% from 12%, the analysts reaffirmed their Buy rating while adjusting the 12-month price target. This aligns with the broader Wall Street sentiment, as indicated by a strong analyst consensus rating of 1.28 (where 1 is Strong Buy), with price targets ranging from $143 to $210.
In other recent news, Axsome Therapeutics reported its first-quarter 2025 earnings, revealing a loss of $1.22 per share, which was better than the anticipated loss of $1.30. The company generated $121.46 million in revenue, slightly under the forecast of $121.58 million. Axsome’s total product revenues increased by 62% year-over-year, driven by strong sales of its products, Auvelity and Sunosi. The company is also preparing for the launch of Cymbravo, which recently received FDA approval for migraine treatment. In terms of analyst activity, BofA Securities maintained a Buy rating on Axsome while slightly raising the stock’s price target to $176. This decision followed Axsome’s financial update and increased visibility on long-term revenue potential due to a patent settlement for Auvelity. Axsome is also expanding its sales force and marketing efforts to support its product launches and ongoing growth initiatives.
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