Investing can be hard but the potential fo an individual stock to pay off big time inspires us. But when you hold the right stock for the right time period, the rewards can be truly huge. One bright shining star stock has been Axsome Therapeutics, Inc. (NASDAQ:AXSM), which is 318% higher than three years ago. And in the last month, the share price has gained 14%. But the price may well have benefitted from a buoyant market, since stocks have gained 12% in the last thirty days.

Since the stock has added US$245m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Given that Axsome Therapeutics didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years Axsome Therapeutics has grown its revenue at 83% annually. That's much better than most loss-making companies. And it's not just the revenue that is taking off. The share price is up 61% per year in that time. It's always tempting to take profits after a share price gain like that, but high-growth companies like Axsome Therapeutics can sometimes sustain strong growth for many years. So we'd recommend you take a closer look at this one, or even put it on your watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).NasdaqGM:AXSM Earnings and Revenue Growth May 5th 2025

Axsome Therapeutics is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this freereport showing consensus forecasts

A Different Perspective

We're pleased to report that Axsome Therapeutics shareholders have received a total shareholder return of 48% over one year. That's better than the annualised return of 5% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of companies that have proven they can grow earnings.

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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