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Looking for stocks that could potentially triple in value by the end of 2030? Two intriguing candidates worth considering are mid-cap biotech Axsome Therapeutics (NASDAQ: AXSM) and e-commerce leader Shopify (NYSE: SHOP). While there’s no guarantee they’ll deliver such impressive gains, here’s why these companies possess essential qualities that could allow them to achieve the required compound annual growth rate (CAGR) to triple by 2030.
First, let’s take a closer look at Axsome Therapeutics. This clinical-stage biotech has already demonstrated exceptional returns in recent years, but that alone isn’t a guarantee of future success. Still, it’s illuminating to examine why Axsome has performed so well to date. In 2022, the company launched its medication Auvelity, which treats depression. However, Axsome isn’t resting on its laurels. Its pipeline boasts other promising programs, including AXS-12, a potential treatment for cataplexy (muscle weakness) in narcolepsy patients that’s currently undergoing a phase 3 study. AXS-12 has received the orphan drug designation from the US Food and Drug Administration (FDA), a program designed to facilitate the development of novel treatments for rare diseases. Moreover, Axsome is testing Auvelity in a phase 3 trial as a potential treatment for Alzheimer’s disease (AD) agitation, and this initiative has earned breakthrough therapy designation from the FDA due to its efficacy in preclinical studies. Other projects are also being advanced into later stages of development.
While Axsome’s financial results haven’t been profitable yet, last year’s revenues surged by 441% compared to the previous year, albeit still remaining in the red, with a net loss per share of $5.27 in 2022 as opposed to $4.60 in 2021, primarily due to increased marketing expenses and the initiation of additional late-stage trials. Nonetheless, with a promising and extensive pipeline and a comparatively modest market capitalization of $3.6 billion, Axsome Therapeutics could be a sound investment option for the future.
Next, we turn our attention to e-commerce specialist Shopify (NYSE: SHOP), which has managed to outperform despite experiencing substantial price drops at different periods. While some critics argue that Shopify is excessively costly, and others assert that it hasn’t consistently achieved profitability, these critiques are not entirely baseless. However, I remain convinced that Shopify will carry on excelling.
Shopify is working diligently to enhance its position in assisting retailers in developing online storefronts. The company aims to provide its clients with everything they require to succeed via its app store, which offers numerous alternatives for personalizing online enterprises. It enables merchants to integrate payments across physical and digital sales channels and assists them in promoting and selling products through popular social media platforms where shoppers spend plenty of time. This strategy has resulted in strong revenue growth for Shopify. The firm looks set to improve its earnings, given its decision to dispose of its expensive and low-margin logistics operation.
Two factors that could enable Shopify to continue expanding are as follows. Initially, the e-commerce sector is projected to experience robust expansion through 2030 and possibly beyond. Secondly, Shopify’s high switching costs mean that merchants are reluctant to leave the platform after investing considerable time and effort establishing their online stores. Although migrating a store to a different provider is feasible, this transition is usually burdensome and unnecessary except for critical reasons. Given that Shopify endeavours to satisfy its clients’ requirements as much as possible, few merchants are expected to switch suppliers.
Finally, it’s crucial to note that before making any purchase of Axsome Therapeutics, you should consider the following:
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Prediction: These 2 Growth Stocks Could Triple By 2030 was initially published by The Motley Fool.
Based on the information provided, how does Axsome Therapeutics’ pipeline compare to its financial results? Are there any risks associated with investing in either company? What other stocks are recommended by The Motley Fool Stock Advisor analyst team?
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