When Will Axsome Therapeutics, Inc. (NASDAQ:AXSM) Turn A Profit?

Axsome Therapeutics, Inc. (NASDAQ:AXSM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Axsome Therapeutics, Inc., a biopharmaceutical company, engages in the development of novel therapies for central nervous system (CNS) disorders in the United States. The company’s loss has recently broadened since it announced a US$239m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$311m, moving it further away from breakeven. As path to profitability is the topic on Axsome Therapeutics' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Axsome Therapeutics

Consensus from 17 of the American Pharmaceuticals analysts is that Axsome Therapeutics is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$143m in 2026. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 58%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Axsome Therapeutics' upcoming projects, however, take into account that generally pharmaceuticals, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Axsome Therapeutics is its debt-to-equity ratio of 194%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Axsome Therapeutics, so if you are interested in understanding the company at a deeper level, take a look at Axsome Therapeutics' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is Axsome Therapeutics worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Axsome Therapeutics is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Axsome Therapeutics’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.