AXSOME THERAPEUTICS, INC. (AXSM): what the price requires
At today's price, AXSOME THERAPEUTICS, INC. (AXSM) is priced for today's economics sustained for ~11.2 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-13 · Source: https://boothcheck.com/report/AXSM
Headline
| Field | Value |
|---|---|
| Ticker | AXSM |
| Company | AXSOME THERAPEUTICS, INC. |
| Current price | $228.66/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | revenue-multiple |
| EV / sales paid | 18.4x |
| Steady-state operating margin assumed | 35.8% |
| Must persist for | 11.2y |
The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.
Solve inputs: computed at a 9.8% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.1 years.
How unusual the bet is: elevated (limited comparison data)
| Reference | Value |
|---|---|
| sustained it ~10 years at this level | 14% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | — | 0 | — |
| Earnings | — | 0 | — |
| Relative | 4.13x | 2 | expensive |
| Growth | 5.19x | 2 | expensive |
Families that call it expensive: Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.1%); the inversion above states its own rate.
Per-Model Detail (n=4)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | Negative/zero FCF — equity value floored at $0 |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $55.33 | 4.13x | yes | P/S fallback (negative EPS): Sector P/S 4.0x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $1.07 | 213.70x | yes | Book value floor: BV/sh $1.07, ROE negative (excluded from median) |
| Two-Stage Excess Return | Asset | $0.96 | 238.19x | yes | Book value with convergence: BV/sh $1.07, ROE converges to ke (excluded from median) |
| Discounted Future Market Cap | Growth | $123.60 | 1.85x | yes | Rev $0.7B, growth 30% (input: historical growth; tapered), Terminal P/S: 9.6x / 12.0x / 14.4x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | $26.82 | 8.53x | yes | Margin ramp: -27% → 12% over 7yr, rev growth 30% (input: historical growth; tapered) |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $55.33 | 4.13x | yes | Revenue $0.71B × sector P/S 4.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $108.2m |
| Interest coverage | -228.5x |
| Share count CAGR (dilution) | 7.5% |
| Burning cash | yes |
Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.
Bullet Takeaways
At $250.61 Axsome is a commercial-stage biotech priced on a revenue multiple, not earnings: the price embeds a long ramp to a roughly 36% operating margin sustained for about 12 years, and no valuation family reaches the quote on current numbers.
The balance sheet shows a company funding a launch, not in distress. Cash of $305 million against gross debt of $197 million leaves a net cash position, but the business is burning, with a Q1 2026 net loss of $64.5 million as it scales the sales force ahead of new indications.
The product engine is growing fast: Q1 2026 net product revenue of $191.2 million rose 57%, led by Auvelity at $153.2 million up 59%. The price is a bet that the launch portfolio converts to durable, high-margin profitability the standard frames cannot yet see.
Bull Case
Start with the balance sheet, because for a commercial-stage biotech it reveals whether management can fund the bet it is making. Axsome held $305.1 million in cash at the end of Q1 2026 against gross debt of roughly $197 million, a net cash position, while it deliberately runs an operating loss to scale commercialization. That is not a company on the edge; it is one investing ahead of revenue with the runway to do it. The spending is a choice, evidenced by selling, general and administrative expense rising to $185 million from $120.8 million as Axsome built pre-launch infrastructure and expanded its specialized sales force to roughly 630 representatives. Management is funding a growth franchise, not patching a hole.
The revenue ramp justifies the conviction. Q1 2026 net product revenue reached $191.2 million, up 57% year over year, led by Auvelity at $153.2 million up 59% and Sunosi at $33.9 million up 34%, with Symbravo adding $4.1 million in early launch. Auvelity, an oral treatment for major depressive disorder, is the engine, and its growth trajectory is the kind of curve that supports a revenue-multiple valuation. The FY2025 10-K details the commercial and regulatory landscape the company navigates, the disclosure base behind a real, growing product portfolio rather than a single-asset story.
The pipeline and label expansion are the upside the price is paying for. Auvelity received FDA approval for agitation associated with Alzheimer's dementia, with a commercial launch scheduled for June 2026, a large new indication that the expanded sales force is built to address. Axsome also submitted an NDA for AXS-12 in cataplexy in narcolepsy and added AXS-20, a pre-Phase 3 PDE10A inhibitor for schizophrenia and Tourette syndrome, to the pipeline. The inversion implies the price needs the portfolio to reach roughly a 36% operating margin and sustain it, a demanding but not unprecedented outcome for a CNS-focused specialty pharma with a multi-product, multi-indication franchise. For an investor underwriting that ramp, a net-cash company growing product revenue near 60% with a freshly approved blockbuster indication is the profile where the bet can pay.
Bear Case
The structural truth a holder would rather not face is that the multiples are pricing what has not happened yet: Axsome does not earn a profit, and at $250.61 (June 27, 2026) no valuation family reaches the price. The company is rich on assets, earnings power, peers, and even forward growth. Book value is about $1.07 a share, so the asset frames are effectively meaningless, the earnings-power and FCF methods do not apply because operating income and free cash flow are negative, and even the sector price-to-sales mark lands near $55, less than a quarter of the price. The entire $250 price is a forward bet on a profitability ramp that exists only in projection.
The near-term reality is widening losses, not narrowing ones. Q1 2026 produced a net loss of $64.5 million, or $1.26 per share, worse than the consensus $0.83 loss, as SG&A jumped to $185 million on pre-launch spending and direct-to-consumer marketing for the Alzheimer's indication. The implied path requires operating margin to swing from roughly negative 24% today toward positive 36% and hold there for about a dozen years. That is a long, unbroken execution sequence: every launch must land, every indication must convert, and the marketing leverage must materialize on schedule. Biotech launches routinely disappoint on uptake, payer coverage, and competitive response, and a single soft launch resets the whole curve.
The specific dependencies are concentration and dilution. Auvelity is the overwhelming majority of revenue, so the franchise is effectively one drug plus a new indication, and any safety signal, label restriction, or competitive entry in CNS would hit the core. Share count has compounded at roughly 7.5% a year, diluting holders as the company funds the buildout, and the FY2025 10-K flags exposure to regulatory and compliance cost pressures including potential carbon-related costs among its risk factors. The bet the price makes is that an unprofitable, single-franchise-heavy biotech executes a multi-year margin ramp flawlessly while diluting along the way. The valuation frames, every one of them far below the price, are the reminder that none of that profitability exists yet.
Valuation
Axsome is valued on a revenue multiple because it has no positive earnings to anchor to. At $250.61 the price embeds a long profitability ramp: the inversion solves for operating margin reaching roughly 36% and sustaining for about 12 years, with the priced-in assumption characterized as elevated and no valuation family reaching the price.
The model X-ray confirms how thin the support is. The applicable methods are a sector price-to-sales mark near $55 on 4.0x trailing revenue, a discounted future market cap near $124 on 30% revenue growth, and a margin-trajectory model near $27 that ramps margins from negative toward positive over seven years. The asset frames collapse to near $1 because book value is minimal and ROE is deeply negative, and the earnings, FCF, and DCF methods are all inapplicable to a loss-making company.
The spread is the information, and it is wide. This is not a case where the methods cluster and the price sits among them; the price is a multiple of even the most generous applicable frame. The price is not a verdict on whether Axsome has good drugs, the 57% revenue growth and the Alzheimer's approval suggest it does. It is a measure of how much future profitability the market has booked: a swing to a high-30s operating margin sustained for over a decade, on a franchise that is currently unprofitable and concentrated in a single lead product.
Catalysts
The dominant catalyst is the Auvelity Alzheimer's-agitation launch. The FDA approved Auvelity for agitation associated with dementia due to Alzheimer's disease, with commercial launch scheduled for June 2026, and Axsome expanded its sales force to roughly 630 representatives to support it. Uptake in this large new indication is the single biggest driver of the revenue ramp the price assumes.
The base-business trajectory is the near-term catalyst. Q1 2026 net product revenue grew 57% to $191.2 million, led by Auvelity at $153.2 million up 59% and Sunosi at $33.9 million up 34%, with Symbravo early in launch. Continued double-digit growth in the depression and sleep franchises, and the pace at which SG&A leverage improves against the $185 million quarterly spend, determine the path toward profitability.
The pipeline adds optionality. Axsome submitted an NDA for AXS-12 in cataplexy in narcolepsy and added AXS-20, a pre-Phase 3 PDE10A inhibitor for schizophrenia and Tourette syndrome. Watch Auvelity launch metrics for the new indication, payer coverage and net pricing, the SG&A-to-revenue trend, cash burn against the $305 million balance, and regulatory milestones for AXS-12 and AXS-20.
Sources: Axsome Q1 2026 earnings release and StockTitan (Q1 2026 revenue $191.2M up 57%, Auvelity $153.2M, Sunosi $33.9M, Symbravo $4.1M, net loss $64.5M), Grafa and Investing.com (Alzheimer's-agitation FDA approval and June 2026 launch, sales force ~630 reps, AXS-12 NDA, AXS-20 pipeline addition, cash $305.1M).
Peer Cohorts (Per Segment, With Filing Citations)
Axsome Therapeutics (consolidated) (reported)
- NBIX (NEUROCRINE BIOSCIENCES, INC.)
- (no filing in the citation store)
- SUPN (SUPERNUS PHARMACEUTICALS, INC.)
- (no filing in the citation store)
- HRMY (HARMONY BIOSCIENCES HOLDINGS, INC.)
- (no filing in the citation store)
- CORT (CORCEPT THERAPEUTICS INC)
- (no filing in the citation store)
- APLS (APELLIS PHARMACEUTICALS, INC.)
- (no filing in the citation store)
- ARQT (ARCUTIS BIOTHERAPEUTICS, INC.)
- (no filing in the citation store)
- ARDX (ARDELYX, INC.)
- (no filing in the citation store)
- TVTX (TRAVERE THERAPEUTICS, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.