Value
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.2 |
| P/S | 8.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.8 |
| PEG | 4.8 |
| Analyst target | 9.0 |
- ▸Forward P/E: 22.1x
- ▸PEG: 1.66
ACAD · Why this verdict
Why ACADIA Pharmaceuticals (ACAD) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score6.1/10
ConfidenceMEDIUM
MacroRISK_OFF
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.
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. | ↓Deteriorating |
| 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.
↓DeterioratingBear 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.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 2.4 |
| Gross margin | 8.4 |
| Op margin | 4.9 |
| Net margin | 10.0 |
| Current ratio | 9.6 |
| FCF quality | 1.4 |
| Moat | 9.0 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 36%
- ▸Strong margins: 33%
- ▸Earnings quality RED FLAG: 18% FCF/NI
- ▸Wide economic moat
Growth
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.6 |
| EPS growth | 4.7 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 1.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.5%/30d — confirmed downtrend
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 9.5 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 50%
Insider
5.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.0 |
- ▸Insider selling (low materiality) — $587,242 (0.017% of mkt cap)
Peer rank
6.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.2 |
| quality rank | 8.7 |
| growth rank | 4.4 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.1 |
| 52w position | 3.1 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.8 |
| days to cover | 6.9 |
| volatility | 4.8 |
| put call | 3.5 |
| implied vol | 2.8 |
| beta | 7.7 |
| debt equity | 9.8 |
- ▸High IV: 63%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 5.0 |
- ▸Earnings in 6 days
How the verdict was assembled
Engine trigger
V9 Gate blocked: Earnings in 6 days (≤7d hard window). Wait for improvement.
Engine technical detail
verdict_path:
L4:PATH_A_DEEP_VALUE->V9:EARNINGS_PROXIMITY|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:6.1>=5.5
- ASYMMETRY:3.7>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
- SECTOR_CONCENTRATION_CAP:sector=Healthcare:4/10:self_excluded
Failed (1)
- EARNINGS_PROXIMITY:6d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.71
Upside
+35.2%
Downside
9.5%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Binary industry: Biotechnology
Investment implication
The STRONG_BUY_WAIT verdict reflects the EARNINGS_PROXIMITY gate's 6d<=7d outcome against Sentiment at 7.5 and asymmetric R:R of 3.71.
The strongest dimensions are Sentiment at 7.5, Quality at 7.2, and Peer rank at 6.7; the weakest are Technical at 2.0, Insider at 5.5, and Growth at 5.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 3.71 and an engine sizing output of STARTER.
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.