AXSOME THERAPEUTICS INC (NASDAQ:AXSM) Fits the Minervini Growth Momentum Strategy

For investors looking to join strict technical rules with fundamental growth momentum, the method made famous by Mark Minervini gives a planned system. This system, often called the SEPA (Specific Entry Point Analysis) strategy, rests on two main parts. First, it uses a fixed Trend Template to find stocks already in strong, verified uptrends, making sure an investor is moving with the current market momentum. Second, it adds this technical health with strict fundamental checks, looking at companies showing quickening earnings and sales growth. The aim is to find market leaders early in their large price gains, where the meeting of a healthy chart and solid business results makes a high-likelihood situation for large returns.

A recent filter made to find such chances, which joins Minervini's Trend Template with a High Growth Momentum (HGM) score, has pointed to AXSOME THERAPEUTICS INC (NASDAQ:AXSM) as a candidate worth more study.

Technical Base: Following the Minervini Trend Template

The Minervini Trend Template is a required list made to sort for stocks in a controlling Stage 2 uptrend. AXSM now fits these important technical rules, which are needed for verifying institutional backing and lasting momentum.

• Moving Average Order: The stock's price is trading above all main moving averages (50-day, 150-day, and 200-day), and these averages are arranged bullishly. The 50-day SMA ($149.19) is above both the 150-day ($125.67) and 200-day ($121.08) SMAs, a clear sign of speeding intermediate-term momentum against a good long-term setting.
• Trend Path: Both the 150-day and 200-day simple moving averages are increasing, confirming the long-term trend is positive. This matches the wider market, where the S&P 500 also shows positive long and short-term trends, giving a good setting for leading stocks.
• Nearness to Highs: A key part of the Minervini idea is to focus on strength, not weakness. AXSM's current price of $169.38 is more than 100% above its 52-week low of $80.98, showing strong recovery and trend health. At the same time, it trades within 10% of its 52-week high of $184.40, showing it is acting like a market leader ready for possible breakout moves, not a straggler.
• Better Relative Strength: Maybe most key, AXSM has a ChartMill Relative Strength (CRS) score of 95.43. This means it has done better than about 95% of all stocks over the past year. Minervini states that real market leaders regularly do better than the wider market, and a high RS score is a direct measure of that leadership.

Fundamental Driver: The Argument for High Growth Momentum

While a healthy chart is needed, Minervini states that the largest winners are always backed by strong fundamental growth. This is where the High Growth Momentum (HGM) score is used, filtering for companies with speeding business results. AXSM's profile as a commercial-stage biopharmaceutical company shows several strong growth reasons.

The company's main product, Auvelity, for major depressive disorder, with Sunosi for sleep disorders, has started a sharp revenue change. This is not guessed future growth but real, speeding results now.

• Fast Revenue Growth: The company's trailing twelve-month (TTM) revenue growth is at a strong 65.8%. More importantly, this growth is steady and speeding on a quarterly basis, with the last three reported quarters showing year-over-year sales growth of 66.0%, 62.0%, and 72.1%, in order.
• Earnings Path Becoming Positive: While the company is not yet profitable on a net income basis, common for commercial-stage biotech firms putting money back heavily into launch and growth, the direction in earnings per share (EPS) is clearly getting better. The EPS growth rate on a TTM basis is 28.5%, and recent quarterly comparisons show large improvements of 26.0%, 41.9%, and 29.9%. Analyst guesses for the next quarter plan EPS growth of nearly 69%, showing expectations for continued quick improvement.
• Analyst Trust: The fundamental momentum is being seen. Analysts have changed their next-year EPS guesses higher by 0.73% and revenue guesses higher by 1.70% over the last three months, reflecting increasing trust in the company's near-term view.
• Business Performance: The company has passed revenue guesses in two of the last four quarters and EPS guesses in two also, showing an ability to perform and possibly beat market expectations.

Technical Condition and Setup Review

According to ChartMill's own analysis, AXSM gets a top-level Technical Rating of 10 out of 10, reflecting very good health across several timeframes. The report states the stock's steady performance, healthy relative strength against both the market and its pharmaceuticals industry group, and its place trading in the higher part of its 52-week range.

However, the analysis also gives a note of care for immediate entry. The Setup Quality rating is now a 5, showing that while the long-term trend is very good, recent price movement has been changeable. The stock has traded in a wide range over the past month ($144.13 - $184.40) and is now in the middle of this range. For a Minervini-style investor, this suggests the stock may need to settle more, making a tighter, lower-changeability pattern (like a Volatility Contraction Pattern) to give a more ideal, lower-risk entry point. The full technical split, including detailed support and resistance levels, can be seen in the detailed AXSM Technical Report.

Summary and More Study

In summary, AXSOME THERAPEUTICS INC gives a strong case study of a stock that fits the ideas of growth momentum investing. It meets the ruled technical needs of the Minervini Trend Template, confirming a healthy uptrend with better relative strength. Fundamentally, it shows the signs of a high-growth company with speeding revenue, a quickly improving earnings path, and positive analyst feeling, main factors that give the "driver" Minervini looks for.

For investors wanting to find similar candidates that join healthy trends with fundamental growth, the filtering method that found AXSM can be a useful beginning point. You can look at current results from this "High Growth Momentum + Trend Template" filter here.

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Disclaimer: This article is for information and learning only. It is not a suggestion to buy or sell any security. The analysis is based on given data and certain filtering methods. All investors should do their own full study, think about their personal money situation, and talk with a qualified financial advisor before making any investment choices. Past results are not a sign of future results. Please read our full disclaimer here.