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On Tuesday, BofA Securities analyst Jason Gerberry updated the investment firm’s stance on Axsome Therapeutics (NASDAQ:AXSM), increasing the price target marginally from $174.00 to $176.00 while maintaining a Buy rating on the stock. Currently trading at $116.49, the stock sits well below the broader analyst target range of $143-$210, according to InvestingPro data. Gerberry’s assessment followed Axsome’s first-quarter financial update, which he described as "relatively straightforward," noting a modest revenue surplus of approximately 2% over consensus estimates and no significant updates to the company’s pipeline.
Axsome Therapeutics, which does not provide forward-year revenue guidance, has been noted for its conservative yet potentially beatable projections for its lead product, Auvelity-MDD, especially after observing strong first-quarter prescription growth. The company has demonstrated impressive execution with 72.16% revenue growth and industry-leading gross margins of 91.49%. Gerberry also highlighted the increased visibility on long-term revenue potential following the Auvelity patent settlement with a key generic competitor. This is anticipated to secure ongoing revenue streams that could surpass $1 billion for the Major Depressive Disorder (MDD) treatment alone.
The analyst’s focus remains on two key aspects: the potential for the Symbravo-migraine launch to exceed expectations and the prospects for Auvelity receiving approval for the treatment of agitation in Alzheimer’s patients, which he believes has a good chance of success. Gerberry’s revisions to Axsome’s operating expenses led to the slight adjustment in the price objective.
In conclusion, Gerberry reiterated a Buy rating for Axsome Therapeutics, citing the company’s underappreciated sales opportunities and potential for re-rating based on catalyst updates expected beyond 2025. With three analysts recently revising earnings estimates upward, investors seeking deeper insights into Axsome’s growth trajectory can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.
In other recent news, Axsome Therapeutics reported its first-quarter 2025 earnings, exceeding expectations with a loss of $1.22 per share compared to the forecasted loss of $1.30. The company’s revenue reached $121.46 million, slightly below the expected $121.58 million. Despite the slight revenue miss, Axsome’s total product revenues increased by 62% year-over-year, showcasing strong performance in its product lines. The recent FDA approval of Cymbravo for migraines is anticipated to support further growth, as the company expands its sales force and prepares for a new marketing campaign. Additionally, Axsome is moving forward with regulatory filings for several new drug applications, including treatments for fibromyalgia and Alzheimer’s disease agitation. Analysts from RBC Capital Markets and Leerink Partners have shown interest in the company’s ongoing negotiations with the FDA and potential market impact of new product launches. As Axsome continues to focus on innovation and market expansion, it projects reaching cash flow positivity by 2026.
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