Axsome Therapeutics (AXSM) has been in the spotlight recently as the company expands its pipeline with the exclusive global rights to AZD7325 for epilepsy and continues showing sales momentum for its depression drug Auvelity.

Axsome’s series of pipeline wins and strong Auvelity sales have been mirrored in the stock’s momentum, with a 57% year-to-date share price return and a 41% total shareholder return over the past year. Gains have accelerated lately and reflect renewed optimism following the new epilepsy drug rights and a solid earnings report.

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With shares surging and Axsome’s future pipeline filling out, the question now is whether this momentum signals a genuine buying opportunity or if the market has already priced in the company’s future growth potential.

Most Popular Narrative: 24.3% Undervalued

The most widely followed narrative assigns Axsome Therapeutics a significantly higher fair value than its last close of $137.40 per share, suggesting market expectations may be lagging behind analyst projections. The narrative’s valuation is anchored on strong pipeline confidence and expectations of rising profits, setting the stage for a potential upside if assumptions are met.

Broader payer coverage and formulary wins (e.g., Auvelity's access to 83% of covered lives, expanding SYMBRAVO coverage) are improving patient access, supporting greater product adoption, which should positively impact net sales and support operating leverage as commercial infrastructure scales.

Craving a look inside the logic driving this big upside? This narrative’s foundation is a bold growth hypothesis, fueled by product launches and expanding coverage. Discover the exact financial leap and margin turnaround analysts are betting on. Will these projections defy gravity or spark debate? Find out what’s really behind that unusually high fair value call.

Result: Fair Value of $181.58 (UNDERVALUED)

However, risks remain, including slow uptake of new drugs and pressure from rivals. These factors could challenge Axsome's ambitious growth projections and valuation case.

Build Your Own Axsome Therapeutics Narrative

If you have a different perspective or want to see where the facts lead you, try creating your own Axsome narrative in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Axsome Therapeutics.

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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.