Why Praxis Precision Medicines is Back on Investors’ Radar

Praxis Precision Medicines (PRAX) is drawing fresh attention after signaling plans to file two New Drug Applications for ulixacaltamide and relutrigine, both already granted Breakthrough Therapy Designation by the US Food and Drug Administration.

Praxis shares have been volatile, with a 30 day share price return of 9.64% and a 90 day share price return of 72.54%. The 1 year total shareholder return is very large, reflecting growing interest around its CNS pipeline and the planned FDA submissions.

If this biotech story has caught your attention, it could be a good moment to scan other promising names through healthcare stocks and see what else fits your watchlist.

With a recent 1 year total return that is very large, a value score of 2 and the shares trading at a sizeable discount to some analyst targets, you have to ask yourself: is Praxis still mispriced or is the market already baking in years of future growth?

Most Popular Narrative: 30.1% Undervalued

At a last close of $314, the most followed narrative pegs Praxis Precision Medicines' fair value at $449.13, which sets a high bar for what needs to go right.

Multiple late stage epilepsy programs, including vormatrigine and relutrigine with breakthrough designation in severe genetic epilepsies, create a portfolio effect in a growing CNS innovation cycle. This increases the probability of multiple approvals and a step change in total company earnings over the back half of the decade.

Curious what earnings power is baked into that gap between $314 and $449.13? Revenue expansion, margin shifts and a rich future profit multiple all sit at the core of this narrative, along with assumptions about how quickly those late stage programs scale.

Result: Fair Value of $449.13 (UNDERVALUED)

However, that upside view still rests on pivotal epilepsy trials delivering clean results and on vormatrigine actually winning meaningful share in a crowded treatment market.

Build Your Own Praxis Precision Medicines Narrative

If you see the story differently or prefer to weigh the numbers yourself, you can shape a fresh thesis in just a few minutes: Do it your way.

A great starting point for your Praxis Precision Medicines research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Praxis is on your radar, do not stop there, the market is full of other opportunities that could sharpen your portfolio and widen your watchlist.

• Spot potential value plays that the market may be overlooking by scanning these 875 undervalued stocks based on cash flows before prices move away from you.
• Capture growth themes at the intersection of medicine and machine learning by checking out these 110 healthcare AI stocks while these names are still early in their story.
• Position yourself for developments in digital finance by reviewing these 18 cryptocurrency and blockchain stocks before sentiment and pricing shift again.

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.