Value
5.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.6 |
| P/S | 7.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.1 |
| Analyst target | 6.0 |
- ▸Forward P/E: 29.4x
ACAD · Why this verdict
Why ACADIA Pharmaceuticals (ACAD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Return on equity of 37% and net margins of 34% indicate the business is generating well-above-average profitability on its capital base, providing a durable earnings floor if the product portfolio is maintained. Quality breakdown | Net margin remains above 25% and return on equity stays above 25% over the next four quarters, confirming the quality of the existing product franchise. | →Stable |
| CounterFree cash flow is running at only 41% of net income, suggesting profits are not converting into cash at the same rate — a meaningful earnings quality gap that could widen if working capital deteriorates. | ||
At current prices, the stock sits approximately 34% below analyst consensus with a reward-to-risk ratio near 6-to-1, reflecting a material price dislocation that could compress as investor confidence in the product portfolio rebuilds. Price targets | Over 12 months, price advances toward the $28.48 target as earnings stabilize and the downtrend resolves. | →Stable |
| CounterThe most recent quarter produced a miss of 75% below expectations, and the prior quarter came in line — two of the four most recent quarters failed to beat, suggesting the dislocation may reflect rational re-rating rather than temporary pessimism. | ||
A confirmed death cross — with the 50-day moving average crossing below the 200-day — combined with a moving average slope declining at approximately 1.7% per month places the stock in a confirmed downtrend, blocking a near-term entry regardless of valuation. Engine gate (failed) | The downtrend reverses over 12 months, evidenced by the 50-day moving average crossing back above the 200-day and price sustaining above the 200-day level. | →Stable |
| CounterVolume accumulation (rising on-balance volume) alongside an improving MACD suggests underlying demand is building beneath the price weakness, and the technical pattern may be closer to a bottoming process than an acceleration lower. | ||
Revenue is concentrated in two products, creating a scenario where any setback in label expansion, reimbursement, or competitive entry could disproportionately impair the business. Bear case | A third product or significant label expansion generates meaningful revenue within 12 months, reducing dependence on the two lead products. | →Stable |
| CounterGross margins of 34% and return on equity of 37% suggest the concentrated product base is exceptionally profitable, lowering the minimum revenue needed to sustain the franchise even without diversification. | ||
Return on equity of 37% and net margins of 34% indicate the business is generating well-above-average profitability on its capital base, providing a durable earnings floor if the product portfolio is maintained.
→StableQuality breakdown
- Expectation
- Net margin remains above 25% and return on equity stays above 25% over the next four quarters, confirming the quality of the existing product franchise.
CounterFree cash flow is running at only 41% of net income, suggesting profits are not converting into cash at the same rate — a meaningful earnings quality gap that could widen if working capital deteriorates.
At current prices, the stock sits approximately 34% below analyst consensus with a reward-to-risk ratio near 6-to-1, reflecting a material price dislocation that could compress as investor confidence in the product portfolio rebuilds.
→StablePrice targets
- Expectation
- Over 12 months, price advances toward the $28.48 target as earnings stabilize and the downtrend resolves.
CounterThe most recent quarter produced a miss of 75% below expectations, and the prior quarter came in line — two of the four most recent quarters failed to beat, suggesting the dislocation may reflect rational re-rating rather than temporary pessimism.
A confirmed death cross — with the 50-day moving average crossing below the 200-day — combined with a moving average slope declining at approximately 1.7% per month places the stock in a confirmed downtrend, blocking a near-term entry regardless of valuation.
→StableEngine gate (failed)
- Expectation
- The downtrend reverses over 12 months, evidenced by the 50-day moving average crossing back above the 200-day and price sustaining above the 200-day level.
CounterVolume accumulation (rising on-balance volume) alongside an improving MACD suggests underlying demand is building beneath the price weakness, and the technical pattern may be closer to a bottoming process than an acceleration lower.
Revenue is concentrated in two products, creating a scenario where any setback in label expansion, reimbursement, or competitive entry could disproportionately impair the business.
→StableBear case
- Expectation
- A third product or significant label expansion generates meaningful revenue within 12 months, reducing dependence on the two lead products.
CounterGross margins of 34% and return on equity of 37% suggest the concentrated product base is exceptionally profitable, lowering the minimum revenue needed to sustain the franchise even without diversification.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The stock offers roughly 34% upside to analyst consensus with a 6-to-1 reward-to-risk ratio, but a confirmed technical downtrend is a hard block for near-term entry, and the thesis rests on two concentrated products whose clinical pipeline adds binary risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 2.5 |
| Gross margin | 8.3 |
| Op margin | 0.0 |
| Net margin | 10.0 |
| Current ratio | 9.4 |
| FCF quality | 3.3 |
| Moat | 6.9 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 37%
- ▸Strong margins: 34%
- ▸Earnings quality RED FLAG: 41% FCF/NI
Growth
2.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 0.0 |
Momentum
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 10.0 |
| OBV | 1.7 |
| MA position | 7.5 |
| Volume | 2.8 |
- ▸Overbought (RSI 87)
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 87 (late-cycle distribution risk)
Sentiment
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.2 |
| Analyst rating | 7.5 |
| Price target | 8.1 |
- ▸LLM news sentiment: +0.63 (n=3)
- ▸Analyst upside: 24%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $302,819 (0.007% of mkt cap)
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.8 |
| quality rank | 8.6 |
| growth rank | 4.5 |
- ▸Superior ROE vs peers
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 2.1 |
| 52w position | 8.3 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.5 |
| days to cover | 0.6 |
| volatility | 3.2 |
| put call | 10.0 |
| implied vol | 2.2 |
| beta | 8.2 |
| debt equity | 0.9 |
| news risk | 6.0 |
- ▸High IV: 67%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 7.0 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:5.1>=4.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.40
- NEWS_BOOST:ANALYST_CLUSTER(3)
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.8<1.5@spot
Warning (3)
- MOMENTUM:5.1<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.80
Upside
+11.9%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 87
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Binary industry: Biotechnology
Investment implication
The F-path SELL output reflects an overall score of 3.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.8<1.5@spot) reinforce the read. Current asymmetry R:R is 0.80 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.9, Catalyst at 6.5, and Quality at 6.3; the weakest are Growth at 2.5, Technical at 3.6, and Risk (lower is worse) at 4.5. The V9 engine flagged 1 failed gate with 3 warnings, producing an asymmetric reward-to-risk of 0.80 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Dislocation Favorable Asymmetry
Trip ifPrice rises above $26.00, leaving less than 10% headroom to the $28.48 target.
- P2Technical Downtrend Hard Block
Trip ifThe 50-day moving average crosses above the 200-day moving average and price sustains above the 200-day for more than 30 consecutive trading days.
- P3Product Revenue Concentration
Trip ifA third commercial product or major label expansion contributes more than $50 million in quarterly revenue.
- P4Strong Quality Metrics
Trip ifNet margin falls below 20% for 2 consecutive quarters.