It has been about a month since the last earnings report for Axsome Therapeutics (AXSM). Shares have lost about 19.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Axsome due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Axsome’s Q4 Earnings Miss Estimates, Pipeline in Focus
Axsome incurred a loss of 78 cents per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 73 cents per share and also the year-ago quarter’s loss of 71 cents.
Axsome currently does not have any approved product in its portfolio. As a result, the company is yet to generate revenues from the same.
Quarter in Detail
Research and development (R&D) expenses were $17.4 million in the quarter, down 9.3% from the year-ago period owing to completion of several studies on the pipeline candidates.
General and administrative (G&A) expenses were $10.4 million, up 100% year over year due to increased stock compensation expenses and personnel costs.
As of Dec 31 2020, Axsome had cash worth $ $183.9 million compared with $202.4 million as of Sep 30, 2020. Management believes that its cash balance as of December-end along with $225 million worth term-loan facility will be enough to fund its anticipated operations for at least through 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -11.69% due to these changes.
VGM Scores
Currently, Axsome has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Axsome has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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