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On Friday, Canaccord Genuity maintained a Buy rating on Compass Pathways (NASDAQ:CMPS) but reduced its price target to $15 from $23. Currently trading at $3.92, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $11 to $45. Sumant Kulkarni, an analyst at Canaccord Genuity, provided insights following the company’s fourth-quarter 2024 financial report released on Monday. Compass Pathways reported operating expenses of $48.4 million, slightly above Canaccord’s estimate of $48 million.
Kulkarni highlighted that Compass Pathways is nearing completion of its COMP005 Phase 3 trial enrollment, with approximately 90% of the necessary participants for its COMP360 psilocybin treatment for treatment-resistant depression (TRD). The company anticipates releasing top-line 6-week data from this study in the second quarter of 2025. According to InvestingPro data, the company maintains a strong financial health position with a current ratio of 5.92 and more cash than debt on its balance sheet. Furthermore, Compass Pathways is on schedule to report findings from its second Phase 3 trial, COMP006, in the second half of 2026.
The company’s ongoing efforts include the design of a late-stage clinical program for post-traumatic stress disorder (PTSD) patients, building on promising early-stage results obtained in May 2024. Canaccord’s continued support for Compass Pathways is bolstered by the company’s recent capital raise, which has extended its cash runway to cover operations at least until the COMP006 26-week data becomes available in the latter half of 2026.
Sumant Kulkarni reaffirmed his optimistic stance on Compass Pathways shares, stating, "We are encouraged that the company reiterated its timeline, and continue to like the stock as we head into these important datasets. Reiterate BUY." This endorsement comes at a pivotal moment for the company as it progresses through critical stages of clinical trials that could potentially reshape treatment options for TRD and PTSD. With a strong analyst consensus recommendation of 1.3 (where 1 is Strong Buy), detailed financial metrics and additional insights are available in the comprehensive Pro Research Report on InvestingPro.
In other recent news, Compass Pathways reported its fourth-quarter earnings, aligning with analyst expectations. The company announced a loss of $0.63 per share, which matched the estimates, with a net loss of $43.3 million compared to $32.5 million in the previous year. Research and development expenses rose to $32.1 million from $27.1 million year-over-year, primarily due to advancements in phase 3 clinical trials for its COMP360 psilocybin treatment. Compass Pathways ended 2024 with $165.1 million in cash and raised an additional $150 million in January 2025, which is expected to fund operations through the second half of 2026. The company confirmed that top-line data from its phase 3 COMP005 trial in treatment-resistant depression is on track for release in the second quarter of 2025. Additionally, Compass Pathways is progressing with plans for a late-stage clinical program in post-traumatic stress disorder after encouraging phase 2a data last year. For the full year 2025, the company anticipates using between $120 million to $145 million in operating activities.
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