The shares have already surged 800% in 2019
Axsome Therapeutics Inc (NASDAQ:AXSM) presented data on AXS-05 at the American Psychiatric Association (APA) conference this weekend, and analysts are rewarding the equity today. Cantor Fitzgerald hiked its price target on AXSM stock to $35 from $25, and SunTrust Robinson started coverage with a "buy" rating and $50 price target -- roughly double Friday's closing price of $24.73. As such, AXSM shares just touched a fresh record high -- and now could be an opportune time for bulls to buy calls on the drugmaker.
Axsome shares peaked at $26.44 out of the gate, and were last seen 2.9% higher at $25.45. The stock has been on absolute fire in 2019, skyrocketing more than 800% so far. In fact, AXSM has suffered just one weekly loss over the past 13 weeks. This, even as the major stock market indexes have struggled in May amid trade war concerns.
Despite the equity's impressive performance this year, near-term options are pricing in relatively low volatility expectations for Axsome shares. The stock's Schaeffer's Volatility Index (SVI) of 76% is at the very bottom of its annual range, in fact.
Over the past three years, there was just one other time where AXSM stock was flirting with new 52-week highs while sporting an SVI in the bottom 20% of its annual range. After that signal, the stock went on to rally another 41.73% over the subsequent month, per data from Schaeffer's Senior Quantitative Analyst Rocky White.
Meanwhile, an extended short squeeze could add fuel to the security's fire. Short interest on AXSM dropped 4.7% in the most recent reporting period, but still accounts for more than 21% of the stock's total available float. At AXSM's average pace of trading, it would take nearly a week to buy back the remaining bearish bets.