B.Riley reiterates Buy on Compass Pathways stock, $22 target

B.Riley has maintained a Buy rating on Compass Pathways (CMPS) stock, with an anticipated price goal of $22.00. This assessment comes in the wake of the Department of Veterans Affairs (VA) selecting sites for the deployment of FDA-approved psychedelic treatments. Despite the stock's impressive performance, with a 78% return over the last year and a 62% increase year-to-date, it is presently trading at $11.15, which is below the analyst's target.

The VA has selected 10 sites to begin deploying these treatments, potentially starting as early as the first quarter of 2026, assuming an FDA approval.

B.Riley estimates that approximately 1,000 veterans in the initial year could generate over $25 million in revenue at modest pricing. The firm estimates the VA treatment-resistant depression patient pool to range between 175,000 and 225,000. With a market capitalization of approximately $1.5 billion, the stock trades at an enterprise value of around $1.2 billion.

Compass Pathways has recently completed two positive Phase 3 pivotal trials for treatment-resistant depression, with potential approval within three to six months. According to InvestingPro analysis, the stock is currently overvalued relative to its Fair Value.

Looking ahead, B.Riley anticipates one psychedelic approval annually from 2028 or 2029, potentially displacing standard care in serious mental illness. The firm identifies Compass Pathways and Neuronetics as the key beneficiaries. In related news, Compass Pathways has shown promising results from Part C of its Phase 3 COMP005 study for its psilocybin therapy, COMP360.

The study indicated continued efficacy and tolerability, with patients on a 25mg dose experiencing a notable reduction in the Montgomery-Åsberg Depression Rating Scale after 52 weeks. Analysts at Oppenheimer have reiterated an Outperform rating with a $20.00 price target, while Jefferies maintains a Buy rating with an $18.00 price target.