ACAD

We rate ACADIA PHARMACEUTICALS INC (ACAD) as a Hold with a composite score of 55.1/100 at a current price of $24.59. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (72th percentile) and quality (71th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (35th percentile) and momentum (55th percentile) tempers our overall conviction. We assign a Narrow Moat rating (58/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is widening, which provides additional comfort in the durability of the competitive position.

ACADIA PHARMACEUTICALS INC holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 55.1/100 places it at rank #1258 in our full 7,333-stock universe. At $3.6B in market capitalization, ACADIA PHARMACEUTICALS INC is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 15%, though momentum at the 55th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 92% (+49.6pp vs sector) narrow to operating margins of 11% (+10.1pp vs sector) and net margins of 14.2%, yielding a gross-to-net conversion rate of 15%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $24.59, ACADIA PHARMACEUTICALS INC is trading near fair value based on current fundamentals. Our value factor score of 64/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 27.0x (a 21% premium to the sector median of 22.3x), EV/EBITDA of 34.1x (at a premium), P/B of 4.4x, P/S of 3.9x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Low uncertainty rating to ACADIA PHARMACEUTICALS INC. The company exhibits strong financial stability with a beta of 0.86, conservative leverage (45% D/E), and a stability factor in the 72th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 72th percentile with quality at the 71th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 92% provide a buffer against cost pressures; above-average stability (72th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate ACADIA PHARMACEUTICALS INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 16.4%, and the balance sheet is managed within acceptable parameters (D/E: 45%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; ACADIA PHARMACEUTICALS INC falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, ACADIA PHARMACEUTICALS INC receives a Hold rating with a composite score of 55.1/100 (rank #1258 of 7,333). Our quantitative framework assigns a Narrow Moat (58/100, trend: widening), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 59/100.

Our analysis supports a neutral stance on ACADIA PHARMACEUTICALS INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.