Axcella Health Inc.'s Stock: Roller-Coaster Ride Continues with Recent Volatility and Positive MomentumStockInvest.us, 2 months ago
Axcella Health Inc. (NASDAQ: AXLA) is a clinical-stage biotechnology company. The company's share has been on a roller-coaster ride, experiencing some drastic fluctuations in their stock price recently.
Axcella finished its trading day on September 13, 2023, at $1.19, experiencing a change of 0.05 (4.39%). Its 52-week high and low are $2.49 and $0.10 respectively. Currently, it has a market capitalization of $87.69 million. The average volume of the stock is approximately 18.04 million, with a trading volume of 90.37 million on the last trading day. The stock's earnings per share (EPS) stands at -1.73 with a negative price-to-earnings (PE) ratio of -0.69.
The company has 73.69 million shares outstanding and a stop-loss at $1.15. The stock has support levels at $1.14, but no known resistance levels are referenced in the data provided. Further, its relative strength index (RSI14) sits at 74, indicating the stock is currently in an overbought territory.
Axcella Health Inc.'s 50-day moving average is $0.26 and its 200-day moving average is $0.43. The 3-month Moving Average Convergence Divergence (MACD) stands at 0.089209, reflecting a positive trend.
Axcella's stock saw significant movement following recent news about its development of a treatment for 'long' Covid fatigue. The news led to a surge in its stock price by as much as 280% on one day and an overall rise by 299% after securing a patent for this method-of-use for its lead candidate, AXA1125.
Notably, AXLA also experienced a dip of 21% despite the general positive outlook linked to this patent. The reasons for this drop remain unclear, as the fall did not directly relate to any negative news about the company's operations or the patent itself.
The median target consensus among analysts for AXLA's stock is $6, which is significantly higher than the current price. Also, the overall consensus among analysts for AXLA is "Buy", with 2 analysts recommending "Buy" and none suggesting "Sell" or "Hold".
Future Outlook and Prediction
For the next trading day, on September 14, 2023, and for the week ahead, it is expected that the stock will likely continue experiencing volatility, given its recent big swings. However, the company's discounted cash flow (DCF) of 1.51 suggests a relatively stable level for the stock in the immediate future.
With no significant resistance level, the ongoing positive momentum, and a strong buy recommendation from analysts with a consensus target of $6, there is potential for the stock to rise. However, its financial fundamentals, including a negative EPS and P/E ratio, combined with its current overbought RSI position, suggest that the stock is overvalued and a correction might be due.
Given the aforementioned factors, the evaluation for Axcella Health Inc.'s stock is a "Hold". This is because, despite having strong potential for growth based on its patent for the Covid-19 treatment, the stock appears overvalued based on its current fundamentals. Hence, investors might want to wait for a potential correction before deciding their next move in the market. Furthermore, the upcoming announcement on the company's earnings, scheduled for October 30, 2023, might also offer a clearer perspective on its future performance.