Praxis Precision Medicines (PRAX) AI Stock Analysis

• Market Cap: $1.03B
• Dividend Yield: N/A
• Average Volume (3M): 429.00K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.46
• Revenue Growth: 338.45%
• EPS Growth: -19.64%
• Country: US
• Employees: 116
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -3.31
• Shares Outstanding: 21,049,585
• 10 Day Avg. Volume: 423,591
• 30 Day Avg. Volume: 429,000
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.58
• Enterprise Value/Revenue: 77.59
• Enterprise Value/Gross Profit: 78.53
• Enterprise Value/Ebitda: -2.26
• 1Y Price Target: $106.73
• Price Target Upside: 116.71% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 48 Neutral
• Price Target: $48.00 ▼(-2.54% Downside)

Praxis Precision Medicines' overall stock score is primarily impacted by its challenging financial performance, characterized by significant net losses and negative cash flows. While the earnings call provided positive insights into clinical advancements and a strong cash position, these are overshadowed by the company's operational inefficiencies and valuation concerns. The technical analysis suggests a neutral trend, offering little support to the stock's attractiveness.

Positive Factors

Clinical Advancements

Significant clinical advancements with vormatrigine highlight Praxis' potential to deliver transformative therapies, strengthening its market position in neuropsychiatric treatments.

Strong Financial Position

A strong cash position ensures Praxis can sustain its R&D efforts and clinical trials, providing a solid foundation for future growth and product development.

Robust Pipeline

A robust pipeline with multiple late-stage assets and upcoming clinical readouts positions Praxis well for long-term success in the biotech industry.

Negative Factors

Operational Inefficiencies

Persistent operational inefficiencies and substantial net losses indicate challenges in achieving profitability, potentially hindering long-term financial health.

Declining Revenue Growth

A decline in revenue growth reflects challenges in market expansion and product adoption, which could impact Praxis' ability to scale and compete effectively.

High Discontinuation Rates

High discontinuation rates in clinical trials could signal potential issues with treatment adherence or side effects, affecting the long-term success of drug development.

Praxis Precision Medicines Business Overview & Revenue Model

Company Description

Praxis Precision Medicines, Inc., a clinical-stage biopharmaceutical company, develops therapies for central nervous system disorders characterized by neuronal imbalance. Its lead product candidates include PRAX-114, an extrasynaptic-preferring GABAA receptor positive allosteric modulator that is in Phase IIa clinical trial for the treatment of major depressive disorder and perimenopausal depression; and PRAX-944, a selective small molecule inhibitor of T-type calcium channels, which is in Phase IIa clinical trial for the treatment of essential tremor. The company is also developing PRAX-562, a persistent sodium current blocker that is in Phase I clinical trial to treat severe pediatric epilepsy and adult cephalgia; PRAX-222, an antisense oligonucleotide (ASO) for patients with gain-of-function (GOF) SCN2A epilepsy; and KCNT1 program for the treatment of KCNT1 GOF epilepsy. It has a cooperation and license agreement with RogCon Inc.; a license agreement with Purdue Neuroscience Company; a research collaboration, option, and license agreement with Ionis Pharmaceuticals, Inc.; and collaboration with The Florey Institute to develop three novel ASOs. The company was incorporated in 2015 and is based in Boston, Massachusetts.

How the Company Makes Money

Praxis Precision Medicines generates revenue primarily through the development and commercialization of its pharmaceutical products. As a clinical-stage company, its current revenue model is heavily reliant on securing funding through public and private investments, including venture capital and initial public offerings (IPOs). The company may also generate revenue through partnerships and collaborations with larger pharmaceutical companies for co-development and co-commercialization of its drug candidates. Furthermore, once its products receive regulatory approval, Praxis can earn revenue through product sales, royalties, and licensing agreements. Significant partnerships with industry leaders can enhance its financial stability and provide additional resources for research and development.

Praxis Precision Medicines Financial Statement Overview

Summary

Praxis Precision Medicines is facing significant financial challenges, with substantial net losses and negative cash flows. Despite a strong gross profit margin and low debt levels, the company's operational inefficiencies and declining revenue growth are major concerns. The balance sheet remains stable, but the negative return on equity and worsening free cash flow highlight the need for a strategic reevaluation to improve financial health.

Income Statement

Praxis Precision Medicines shows a declining financial performance. The gross profit margin is relatively high at 98.1% for TTM (Trailing-Twelve-Months), but the company is suffering from significant net losses with a net profit margin of -2617.6%. Revenue has decreased by 5% in the TTM period compared to the previous annual report. Both EBIT and EBITDA margins are deeply negative, reflecting ongoing operational challenges.

Balance Sheet

The balance sheet reveals a relatively stable financial position with a debt-to-equity ratio of 0.0024, indicating low leverage. However, the return on equity is significantly negative at -48.4% due to ongoing losses. The equity ratio stands at 91.8%, suggesting strong equity financing but persistent operational losses are a concern.

Cash Flow

Cash flow analysis highlights ongoing financial challenges. The free cash flow is negative and has worsened by 24.5% compared to the previous year. Operating cash flow to net income ratio is 0.77, indicating cash flow issues. The free cash flow to net income ratio is 0.77, reflecting insufficient cash flow to cover losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.76M	8.55M	2.45M	0.00	0.00	0.00
Gross Profit	7.67M	8.20M	2.45M	-1.17M	-1.59M	-746.00K
EBITDA	-266.41M	-199.81M	-125.94M	-212.86M	-165.47M	-61.08M
Net Income	-251.01M	-182.82M	-123.28M	-213.07M	-166.88M	-61.82M
Balance Sheet
Total Assets	452.83M	483.11M	87.95M	115.13M	292.75M	303.18M
Cash, Cash Equivalents and Short-Term Investments	301.27M	392.57M	81.30M	100.49M	275.91M	296.61M
Total Debt	755.00K	1.37M	2.50M	4.50M	4.31M	763.00K
Total Liabilities	48.61M	37.66M	18.28M	39.02M	41.94M	15.72M
Stockholders Equity	404.22M	445.45M	69.67M	76.11M	250.81M	287.46M
Cash Flow
Free Cash Flow	-191.36M	-131.76M	-111.19M	-185.49M	-125.60M	-52.62M
Operating Cash Flow	-191.31M	-131.76M	-111.14M	-185.04M	-124.55M	-52.62M
Investing Cash Flow	5.48M	-248.49M	38.95M	96.89M	-140.52M	4.00K
Financing Cash Flow	198.10M	514.32M	91.87M	10.46M	107.59M	304.42M

Praxis Precision Medicines Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 49.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRAX, the sentiment is Positive. The current price of 49.25 is above the 20-day moving average (MA) of 44.16, above the 50-day MA of 48.10, and below the 200-day MA of 51.52, indicating a neutral trend. The MACD of 0.24 indicates Negative momentum. The RSI at 59.00 is Neutral, neither overbought nor oversold. The STOCH value of 89.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRAX.

Praxis Precision Medicines Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UPB	61 Neutral	902.98M	-7.95	-13.37%	―	―	―
SEPN	61 Neutral	753.93M	-7.78	-17.09%	―	-13.37%	-1025.90%
ZBIO	58 Neutral	854.00M	-4.40	-50.24%	―	―	―
SPRY	50 Neutral	951.70M	-19.48	3.11%	―	22367.80%	-5.15%
PRAX	48 Neutral	$1.03B	―	-60.98%	―	338.45%	-19.64%
ABCL	46 Neutral	1.43B	-8.32	-16.45%	―	-0.54%	-6.28%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Praxis Precision Medicines Corporate Events

Praxis Precision Medicines Signs New Sales Agreement

Praxis Precision Medicines, Inc. announced the termination of its 2024 Sales Agreement with Jefferies LLC on September 2, 2025, which previously allowed the company to sell shares of its common stock up to $250 million. This decision halts further sales under the 2024 ATM Program after raising approximately $86.2 million. Subsequently, on September 5, 2025, Praxis entered into a new sales agreement with TD Securities (USA) LLC to offer shares worth up to $250 million through an ‘at the market’ equity offering program, indicating a strategic shift in its capital-raising approach.

Praxis Announces Positive Results from RADIANT Study

On August 4, 2025, Praxis Precision Medicines announced positive topline results from the RADIANT study, which evaluated vormatrigine in patients with focal onset seizures. The study showed a 56.3% median reduction in seizure frequency over eight weeks, with 22% of patients achieving complete seizure reduction in the last 28 days. Vormatrigine was well-tolerated, and additional data will be presented at upcoming conferences. The company also initiated two registrational studies for developmental and epileptic encephalopathies and received FDA Breakthrough Therapy Designation for relutrigine. Financially, Praxis reported a net loss of $71.1 million for the second quarter of 2025, with cash reserves expected to fund operations into 2028.

Praxis Precision Medicines Gains FDA Breakthrough Designation

On July 17, 2025, Praxis Precision Medicines announced that the U.S. FDA granted breakthrough therapy designation for relutrigine, a treatment for pediatric patients with SCN2A and SCN8A developmental and epileptic encephalopathies. This designation, supported by positive Phase 2 EMBOLD study data, allows for expedited development and review, potentially enhancing the company’s market position in neurological therapies.

Praxis Precision Medicines Holds Annual Stockholders Meeting

On June 26, 2025, Praxis Precision Medicines, Inc. held its Annual Meeting of Stockholders, where key decisions were made. Stockholders elected two Class II directors, ratified the appointment of Ernst & Young LLP as the independent accounting firm, and approved executive compensation on a non-binding basis. These outcomes reflect the company’s ongoing governance and operational strategies, potentially impacting its future direction and stakeholder relations.