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Growth or a Bubble? AXSM Stock Surge

Matt MonacoAvatar
Written by Matt Monaco Reviewed by Jack Kellogg Fact-checked by Tim Sykes
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Buoyed by a positive FDA update for their antidepressant treatment and a strong Q4 revenue forecast, Axsome Therapeutics Inc.’s stocks received a significant boost, trading up by 20.96 percent on Monday.

Market Highlights: AXSM’s Notable Developments

  • Baird analyst Joel Beatty has increased their price target on Axsome Therapeutics to $132 from $116, maintaining an optimistic “Outperform” rating.
  • Mizuho has also raised its price target for Axsome Therapeutics to $137 from $122, following the approval of their new migraine treatment, Symbravo.
  • H.C. Wainwright has adjusted its target to $190 from $180, linking this to the approval of AXS-07 for migraines and potential future catalysts.
  • Axsome confirmed the FDA approval for Symbravo, marking a big step in migraine treatment due to its fast relief and consistent effectiveness.
  • Truist has supported these positive moves, adjusting their price target to $190 based on strong data and expert validation.

Candlestick Chart

Live Update At 17:20:21 EST: On Monday, February 10, 2025 Axsome Therapeutics Inc. stock [NASDAQ: AXSM] is trending up by 20.96%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Axsome Therapeutics Inc.: Recent Financial Overview

As any seasoned trader knows, the path to success in trading is rarely a straightforward one. Each trade carries its own set of challenges and opportunities, requiring constant analysis and adaptation. As millionaire penny stock trader and teacher Tim Sykes, says, “Embrace the journey, the ups and downs; each mistake is a lesson to improve your strategy.” This mindset is crucial for those who wish to thrive in the volatile world of trading. Learning from every success and setback helps traders refine their techniques and develop a more effective approach over time.

Recent earnings reports indicate mixed financial performance for Axsome Therapeutics. The revenue of $270.6M showcases significant growth. However, the earnings show a picture of struggle, with negative returns dominating the financial landscape. The company’s operating income is deep in the red at around -$62.62M. Gross margins hold strong at 91.1%, but, expenses are high, dampening net income figures.

From January to February 2025, the stock experienced volatility akin to a roller-coaster ride, closing at $127.08, after its lowest dip at $116.81. Analysts’ optimistic price targets, aided by FDA approval news, seem to stoke confidence amid financial losses. Despite achieving FDA approvals, the downside leans on the company’s heavy losses, leaving investors cautious.

More Breaking News

Key ratios reveal Axsome’s struggle with profitability, having a negative return on equity of -170.41. While the quick ratio of 2.3 reflects solid short-term financial health, their long-term debt is concerning. Axsome’s vibrant revenue growth underlines success with new drugs, balancing out trembles in investor confidence from the less rosy earnings report.

Decoding the Stock’s Surge: Key Influences

Axsome’s stock soared, reminiscent of a quick-moving elevator, as analysts and events placed a glowing spotlight on their new innovations. It’s hard to recall the last time a single drug approval—Symbravo, for migraines with its remarkable effects on treatment speed and sustainability—has had such an immediate impact on stock sentiment. This innovative product positions Axsome potentially as a leader in treating migraine symptoms, setting the stage for more future approvals.

On the flip side, even with such strides, the masked specter of financial losses haunts. Axsome Therapeautics holds a balance sheet that demands caution from seasoned investors. The temporary euphoria in approval needs grounding in sustainable, profitable results for long-term resilience, a path not yet cemented.

An elevated stock price, supported by analyst upgrades and high expectations for new drugs, is like standing on a peak with potential pitfalls around the corner. Investors should balance excitement with careful scrutiny of financial threads—looking at whether current momentum is reliable or if they’re riding up a bubble.

The growing revenue, alongside promising treatments, fortifies Axsome’s forward-looking market potential. But navigating the stock requires the savvy of managing the uncertainty harmonizing financial strength with promising advances.

Conclusion: Looking Ahead with Caution

The road ahead for Axsome will be laden with achievements and challenges. Walk carefully on this economic terrain, with eyes peeled for both promising highs and lurking lows. Watch closely, balance risks, and stay well informed about future earnings reports—every trader’s dashboard to maneuver through this fluctuating market.

As millionaire penny stock trader and teacher Tim Sykes says, “Consistency is key in trading; don’t let emotions dictate your trades.” As the narrative unfolds, Axsome will likely continue its path of innovation. But only time shall tell if this forward momentum is genuine growth or the inflation of an exuberant bubble. Traders must remain vigilant and not blind themselves to potential risks. Indeed, the excitement is palpable, but the strategic mind knows caution is your steadfast companion.

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The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”