COMPASS Pathways Evaluates Prospects Despite Earnings Miss

LOS ANGELES- COMPASS Pathways  reported a quarterly loss of $0.55 per share on May 8th, missing analysts’ expectations of a $0.52 loss. The company is forecasted to post a loss of $2 per share for the current and next fiscal years.

Despite the earnings miss, COMPASS’s stock rose by $0.52 to close at $7.46 on Thursday, with a trading volume of 309,577 shares, significantly higher than the average of 558,091 shares. The company’s market capitalization stands at $510.12 million, with a price-to-earnings ratio of -3.15 and a beta of 2.27. Its stock has fluctuated between a low of $5.01 and a high of $12.75 over the past year.

Analysts remain optimistic about COMPASS Pathways’ future, with HC Wainwright, Royal Bank of Canada, Morgan Stanley, and Cantor Fitzgerald issuing “buy” or “overweight” ratings. The company’s lead psilocybin-based therapy, COMP360, is under Phase 3 clinical trials for treatment-resistant depression, with results expected in the fourth quarter of 2024. RBC Capital Markets sees potential peak revenues of $2.3 billion from this program and set a price target of $23, indicating a significant upside.

The company is also preparing for potential regulatory approval and commercialization of its therapies. COMPASS Pathways holds $262.9 million in cash, which is expected to fund operations through 2026. Despite a challenging market environment for biotech stocks, the company is viewed as a leader in the developing field of psychedelic therapies.