Praxis Precision Medicines (PRAX) AI Stock Analysis

• Market Cap: $958.42M
• Dividend Yield: N/A
• Average Volume (3M): 498.94K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.54
• Revenue Growth: 338.45%
• EPS Growth: -19.64%
• Country: US
• Employees: 116
• Sector: Healthcare
• Sector Strength: 51
• Industry: Biotechnology
• EPS (TTM): -3.31
• Shares Outstanding: 21,045,780
• 10 Day Avg. Volume: 338,871
• 30 Day Avg. Volume: 498,938
• 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: 0.63
• Enterprise Value/Revenue: 77.59
• Enterprise Value/Gross Profit: 78.53
• Enterprise Value/Ebitda: -2.26
• 1Y Price Target: $109.10
• Price Target Upside: 142.77% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 47 Neutral
• Price Target: $48.00 ▲(6.81% Upside)

Praxis Precision Medicines faces significant financial challenges, with ongoing net losses and negative cash flows being the most critical factors affecting its stock score. Despite these financial difficulties, the company has shown promising clinical developments and received positive regulatory feedback, which provides some optimism for future growth. Technical indicators and valuation metrics are currently unfavorable, further weighing down the overall score.

Positive Factors

Efficacy and Competitive Profile

Clinical data suggests that both vormatrigine and relutrigine have competitive drug profiles in their respective epilepsy treatments.

Market Potential

The analyst raised the price target for the stock to $115, reflecting increased confidence in vormatrigine's market potential and peak sales estimates.

Seizure Reduction Efficacy

PRAX announced very positive Ph2 open-label RADIANT data of vormatrigine in FOS patients, showing a 56.3% median reduction in seizure frequency, with rapid responses seen as early as week 1 and sustained out to week 8.

Negative Factors

Discontinuation Rate

The discontinuation rate of 23% was higher than expected, which is pressuring Praxis shares despite impressive efficacy.

Safety Concerns

Safety looked comparable to competition with 23% discontinuations, which put pressure on PRAX.

Share Pressure

The discontinuation rate of 23% was higher than expected, which is pressuring Praxis shares despite impressive efficacy.

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 primarily generates revenue through the development and commercialization of its pipeline of CNS disorder therapies. The company invests in research and development to advance its drug candidates through clinical trials, seeking regulatory approval to bring these therapies to market. Revenue is expected to be generated from product sales, once these therapies are approved, as well as through potential partnerships and collaborations with other pharmaceutical companies. Praxis may also receive milestone payments and royalties from licensing agreements with partners who wish to commercialize its therapies in specific markets.

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: Neutral
• Last Price: 44.94
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRAX, the sentiment is Neutral. The current price of 44.94 is below the 20-day moving average (MA) of 46.78, below the 50-day MA of 49.23, and below the 200-day MA of 54.03, indicating a bearish trend. The MACD of -1.05 indicates Positive momentum. The RSI at 46.32 is Neutral, neither overbought nor oversold. The STOCH value of 30.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PRAX.

Praxis Precision Medicines Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GYRE	57 Neutral	$703.00M	473.01	5.47%	―	―	―
NTLA	55 Neutral	$1.22B	―	-56.95%	―	14.99%	14.42%
XERS	55 Neutral	$1.26B	―	222.83%	―	35.62%	49.58%
Sector *	51 Neutral	$7.86B	-0.33	-41.57%	2.23%	23.26%	-2.03%
PRAX	47 Neutral	$958.42M	―	-60.98%	―	338.45%	-19.64%
XNCR	46 Neutral	$579.86M	―	-29.22%	―	-2.07%	22.52%
NUVB	45 Neutral	$1.02B	―	-64.40%	―	900.35%	70.25%

Praxis Precision Medicines Corporate Events

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.