Analyzing Axsome Therapeutics (NASDAQ:AXSM) & Cronos Group (NASDAQ:CRON)

Cronos Group (NASDAQ:CRON) and Axsome Therapeutics (NASDAQ:AXSM) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Cronos Group and Axsome Therapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cronos Group	0	2	3	0	2.60
Axsome Therapeutics	1	2	17	1	2.86

Cronos Group presently has a consensus target price of $2.30, suggesting a potential downside of 33.14%. Axsome Therapeutics has a consensus target price of $275.74, suggesting a potential upside of 76.68%. Given Axsome Therapeutics’ stronger consensus rating and higher probable upside, analysts clearly believe Axsome Therapeutics is more favorable than Cronos Group.

Valuation & Earnings

This table compares Cronos Group and Axsome Therapeutics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cronos Group	$146.59 million	8.65	-$9.45 million	$0.20	17.20
Axsome Therapeutics	$638.50 million	12.80	-$183.17 million	($3.75)	-41.62

Cronos Group has higher earnings, but lower revenue than Axsome Therapeutics. Axsome Therapeutics is trading at a lower price-to-earnings ratio than Cronos Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

8.7% of Cronos Group shares are owned by institutional investors. Comparatively, 81.5% of Axsome Therapeutics shares are owned by institutional investors. 7.8% of Cronos Group shares are owned by insiders. Comparatively, 20.6% of Axsome Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Cronos Group and Axsome Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cronos Group	39.08%	4.85%	4.62%
Axsome Therapeutics	-24.68%	-265.55%	-28.10%

Risk & Volatility

Cronos Group has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Axsome Therapeutics has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Summary

Axsome Therapeutics beats Cronos Group on 8 of the 14 factors compared between the two stocks.

About Cronos Group

Cronos Group Inc. operates as a cannabinoid company that engages in the cultivation, production and marketing of cannabis products in Canada, Israel, and Germany. It offers dried flower, pre-rolls, oils, vaporizers, edibles, and cannabis tinctures under the Spinach, Lord Jones, and PEACE NATURALS brands. Cronos Group Inc. was founded in 2012 and is based in Toronto, Canada.

About Axsome Therapeutics

Axsome Therapeutics, Inc., a biopharmaceutical company, engages in the development of novel therapies for central nervous system (CNS) disorders in the United States. The company’s commercial product portfolio includes Auvelity (dextromethorphan-bupropion), a N-methyl-D-aspartate receptor antagonist with multimodal activity indicated for the treatment of major depressive disorder; and Sunosi (solriamfetol), a medication indicated to the treatment of excessive daytime sleepiness in patients with narcolepsy or obstructive sleep apnea. It is also developing AXS-05, which is in Phase III clinical trial to treat Alzheimer’s disease agitation, as well as that has completed phase II clinical trial for the treatment of smoking cessation; AXS-07, an investigational medicine that has completed Phase III trials for the acute treatment of migraine; AXS-12, an investigational medicine, which is in Phase III trial to treat narcolepsy; AXS-14, a selective and potent norepinephrine reuptake inhibitor that has completed Phase III trial for the treatment of fibromyalgia and other conditions; and solriamfetol, a dual-acting dopamine and norepinephrine reuptake inhibitor, which has completed a Phase 2 trial for treating attention-deficit/hyperactivity disorder, and is in phase 2 major depressive, binge eating, and shift work disorder. Axsome Therapeutics, Inc. has a research collaboration agreement with Duke University for evaluating AXS-05 in smoking cessation. The company was incorporated in 2012 and is based in New York, New York.