AXSM Should I Buy
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Axsome Therapeutics Inc. (AXSM) is not a strong buy at the moment for a beginner investor with a long-term horizon. While the company has positive catalysts such as strong revenue growth and favorable analyst ratings, the technical indicators and options sentiment suggest a lack of immediate upward momentum. Additionally, the company's negative net income and EPS trends, coupled with no significant trading signals, make it prudent to hold off on buying until clearer entry points or stronger signals emerge.
The MACD is negative and expanding, indicating bearish momentum. RSI is neutral at 45.616, and moving averages are converging, showing no clear trend. The stock is trading near a key support level (S1: 179.482), with resistance at 189.23. Overall, the technical indicators suggest a lack of immediate bullish momentum.
Strong revenue growth in Q3 2025 (up 63.22% YoY).
Favorable analyst ratings and increased price targets, with multiple firms maintaining Buy or Outperform ratings.
Potential regulatory approval for AXS-05 in Alzheimer's Disease Agitation, with a PDUFA date in April
High gross margin of 92.09%.
Declining net income (-26.89% YoY) and EPS (-29.85% YoY).
Bearish technical indicators, including a negative MACD and neutral RSI.
Options sentiment indicates short-term bearishness.
No recent news or significant insider/hedge fund activity to drive momentum.
In Q3 2025, revenue increased by 63.22% YoY to $170.99M, demonstrating strong top-line growth. However, net income dropped by 26.89% YoY to -$47.23M, and EPS declined by 29.85% YoY to -0.94, reflecting ongoing profitability challenges. Gross margin improved slightly to 92.09%, up 1.86% YoY.
Analysts are broadly positive on AXSM, with several firms raising price targets recently. The highest target is $260 (H.C. Wainwright), and the lowest is $195 (TD Cowen). Analysts cite strong commercial potential for Auvelity and pipeline development as key drivers. However, Morgan Stanley downgraded the stock to Equal Weight, citing limited near-term upside after a recent run-up.
