Axsome Therapeutics, Inc. (AXSM) Stock: Is This Biotechnology Stock Worth Your Attention?

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Axsome Therapeutics, Inc. (AXSM) is working its way for to the top in the market in today’s trading session. The company, focused on the biotech industry, is presently priced at $15.35 after heading up 18.08% so far today. In terms of biotech stocks, there are quite a few factors that have the potential to lead to price movement in the market. One of the most common is news. Here are the most recent stories relating to AXSM:

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Mar-22-19 11:39AM Harry Boxer: 3 biotech stocks with momentum
Mar-14-19 07:26AM Axsome: 4Q Earnings Snapshot
07:00AM Axsome Therapeutics Reports Fourth Quarter and Full Year 2018 Financial Results and Provides Business Update
Mar-07-19 06:03AM 2 Biotech Stocks With Major Incoming Catalysts
Mar-06-19 07:00AM Axsome Therapeutics Secures $24 Million Growth Capital Loan Facility Led by Silicon Valley Bank

However, when making a decision to invest, investors should look at much more than news, this is especially the case in the highly speculative biotech space. Here’s what’s happing when it comes to Axsome Therapeutics, Inc..

What We’ve Seen From AXSM

While a gain in a single session, like what we’re seeing from Axsome Therapeutics, Inc. may make some investors jump for joy, a single session gain by itself shouldn’t be the basis of a decision to, or not to, invest in a stock. It’s generally smart to look at trends just a single session. In the case of AXSM, here are the returns that investors have experienced:

  • Past 5 Trading Sessions – In the last 5 trading sessions, AXSM has seen a change in price amounting to 19.27%.
  • Past 30 Days – The monthly performance from Axsome Therapeutics, Inc. has been 53.30%.
  • Past Quarter – Over the past quarter, the company has generated a ROI that works out to 428.46%
  • Past 6 Months – Throughout the past 6 months, we have seen a change that equates to 312.70% from the company.
  • YTD – Since the the last trading session of last year AXSM has produced a return on investment of 360.99%.
  • Full Year – Lastly, throughout the past full year, we have seen movement amounting to 381.48% from AXSM. Over this period, the stock has traded at a high price of 7.79% and a low price of 691.24%.

Ratios To Pay Attention To

Looking at various key ratios associated with a company can provide prospective traders a look of how risky and/or rewarding a stock pick might be. Below are some of the most important ratios to look at when digging into AXSM.

Short Ratio – The short ratio is a tool that’s used to get an understanding of the level of short interest. As the short ratio heads up, it means that more investors believe that the value of the stock is headed for declines. In general, biotechnology stocks tend to carry a higher short ratio. However, we also tend to see a lot of short squeezes in the industry. Nonetheless, when it comes to Axsome Therapeutics, Inc., it’s short ratio comes to 1.23.

Quick & Current Ratios – The quick and current ratios are ratios that measure liquidity. Basically, they measure the company’s abilities to cover its debts when they come due with only quick assets or current assets. Because many biotech companies are heavily reliant on continued support from investors, the current and quick ratios can look bad. Nonetheless, quite a few good picks in the biotechnology sector do have positive quick and current ratios. In terms of AXSM, the quick and current ratios add up to 1.40 and 1.40 respectively.  

Book To Share Value – The book to share value compares the current book value of assets currently owned by the company to the share price of the stock. In this particular case, that ratio works out to 0.03.

Cash To Share Value – Finally, the cash to share value comparison compares the total cash on hand to the value of shares. Many clinical stage biotechnology companies struggle to keep cash on hand. So, when investing in the biotechnology space, this is an important ratio to look into. In terms of AXSM, the cash to share value is 0.41.

How Analysts Feel About Axsome Therapeutics, Inc.

Although it’s not a good idea to unknowingly follow the opinions of analysts, it is a smart idea to use their opinions when validating your own due diligence before making an investment decision in the biotechnology space. Below are the most recent moves that we have seen from analysts with regard to AXSM.

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Mar-15-19 Reiterated H.C. Wainwright Buy $15 → $18
Oct-03-16 Resumed Brean Capital Buy
Dec-15-15 Initiated Cantor Fitzgerald Buy
Dec-14-15 Initiated Ladenburg Thalmann Buy

Smart Money Follows Big Money

One thing that I have learned so far in my brief time on Earth has been that smart money tends to follow big money. Usually, investors that are looking to keep their investments relatively safe will follow trades made by institutions and insiders of the company. So, where is the big money in regard to AXSM? Here’s the scoop:

  • Institutions – Currently, institutional investors own 11.60% of AXSM. However, it is important to mention that institutional ownership has moved in the amount of 8.62% over the last 3 months.
  • Insiders – as it relates to insiders, those close to the situation currently own 27.25% of Axsome Therapeutics, Inc.. Insider ownership of the company has moved 0.11% over the past 3 months.

Looking At Share Counts

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 33.89M shares of Axsome Therapeutics, Inc. outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, AXSM has a float of 24.22M.

I also find it important to look at the short percent. Think about it, if a large portion of the float is sold short, the overall feeling among investors is that the company is going to fall hard. When it comes to AXSM, the short percentage of the float is currently 11.99%. Most traders believe that a concerning short percent of the float is any percentage over 40%. Nonetheless, I have calculated that a short ratio over 26% is usually a play that comes with hefty risk.

Financial Results And Expectations

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-0.93. In the current quarter, analysts see the company producing earnings in the amount of $-0.30. Over the last 5 years, AXSM has generated revenue in the amount of $0 with earnings coming in at -56.60%. On a quarter over quarter basis, earnings have seen movement of -4.70% and revenue has seen movement of 0.

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