U.S. markets closed

Why Is Axsome (AXSM) Down 15.7% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for Axsome Therapeutics (AXSM). Shares have lost about 15.7% 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 the most recent earnings report in order to get a better handle on the important drivers.

Axsome's Earnings Miss in Q1, Pipeline Progresses

Axsome reported first-quarter 2020 loss per share of 88 cents, wider than the Zacks Consensus Estimate of a loss of 60 cents and also the year ago quarter’s loss of 32 cents.

Axsome currently does not have any approved product in its portfolio. As a result, the company is yet to generate any revenues from the same.

Quarter in Detail

Research and development (R&D) expenses were $27.5 million in the quarter, significantly higher than $7.6 million in the year-ago period due to escalated development costs of AXS-05 and AXS-07.

General and administrative (G&A) expenses were $5 million, up 78.5% year over year due to increased stock compensation expenses and higher personnel costs.

As of Mar 31 2020, Axsome had cash worth $197.3 million compared with $220 million as of Dec 31, 2019. Axsome believes that its cash balance as of March-end will be enough to fund its anticipated operations for at least a couple of years.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

At this time, Axsome has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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

Axsome has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Axsome Therapeutics, Inc. (AXSM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.