U.S. markets close in 2 hours 38 minutes
  • S&P 500

    3,711.35
    +64.06 (+1.76%)
     
  • Dow 30

    29,651.18
    +516.19 (+1.77%)
     
  • Nasdaq

    11,002.14
    +172.63 (+1.59%)
     
  • Russell 2000

    1,707.29
    +44.78 (+2.69%)
     
  • Crude Oil

    81.67
    +3.17 (+4.04%)
     
  • Gold

    1,669.00
    +32.80 (+2.00%)
     
  • Silver

    18.87
    +0.53 (+2.91%)
     
  • EUR/USD

    0.9739
    +0.0141 (+1.47%)
     
  • 10-Yr Bond

    3.7470
    -0.2170 (-5.47%)
     
  • GBP/USD

    1.0900
    +0.0169 (+1.58%)
     
  • USD/JPY

    143.9250
    -0.8660 (-0.60%)
     
  • BTC-USD

    19,559.10
    +515.93 (+2.71%)
     
  • CMC Crypto 200

    445.74
    +16.96 (+3.95%)
     
  • FTSE 100

    7,005.39
    +20.80 (+0.30%)
     
  • Nikkei 225

    26,173.98
    -397.89 (-1.50%)
     

Investors bid Axsome Therapeutics (NASDAQ:AXSM) up US$448m despite increasing losses YoY, taking five-year CAGR to 57%

·3 min read

Long term investing can be life changing when you buy and hold the truly great businesses. And we've seen some truly amazing gains over the years. For example, the Axsome Therapeutics, Inc. (NASDAQ:AXSM) share price is up a whopping 867% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. It's also good to see the share price up 91% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. It really delights us to see such great share price performance for investors.

The past week has proven to be lucrative for Axsome Therapeutics investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for Axsome Therapeutics

Axsome Therapeutics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Axsome Therapeutics saw its revenue grow at 109% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 57%(per year) over the same period. Despite the strong run, top performers like Axsome Therapeutics have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Axsome Therapeutics

A Different Perspective

It's nice to see that Axsome Therapeutics shareholders have received a total shareholder return of 102% over the last year. That's better than the annualised return of 57% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with Axsome Therapeutics (including 1 which is potentially serious) .

Axsome Therapeutics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here