Is CMPS a good stock to buy? We came across a bullish thesis on COMPASS Pathways plc on BioEquity Watch’s Substack. In this article, we will summarize the bulls’ thesis on CMPS. COMPASS Pathways plc’s share was trading at $11.26 as of June 9th.
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COMPASS Pathways plc operates as a biotechnology company that focuses on mental health in the United Kingdom and the United States. CMPS is transitioning from a clinical-stage research company into a commercial-scale pharmaceutical platform, a shift the market continues to undervalue despite significant de-risking of its lead asset COMP360.
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Its core investment thesis is anchored in the successful Phase 3 clinical program, where COMP360 demonstrated statistically significant reductions in depressive symptoms, supported by a rolling FDA New Drug Application that has materially reduced regulatory risk.
With crystalline psilocybin patents extending to 2040 and integration into established interventional psychiatry infrastructure, the company has built a defensible moat that positions it ahead of broader psychedelic peers. The treatment is designed to disrupt rigid neural circuitry through 5-HT2A receptor activation, enabling durable neuroplasticity and creating a differentiated episodic model versus chronic antidepressant therapies.
Phase 3 results across COMP005 and COMP006 showed clinically meaningful MADRS improvements with durable response signals and a strong safety profile, including low serious adverse event rates. These data support a high probability of regulatory approval and underpin a base-case valuation framework that suggests significant upside relative to the current share price.
The addressable market for treatment-resistant depression is expanding into a multi-billion-dollar opportunity, with Compass positioned to compete directly against existing therapies such as Spravato while offering potentially longer-lasting effects.
Strategically, the company is viewed as an attractive acquisition target for large pharmaceutical players seeking CNS exposure, with potential interest from AbbVie, AstraZeneca, and Johnson & Johnson. Overall, Compass Pathways represents a high-conviction opportunity with $19 to $22 price targets and substantial upside as commercialization approaches into 2027 period.
Previously, we covered a bullish thesis on CRISPR Therapeutics AG (CRSP) by MADD-Scientis in March 2025, which highlighted Casgevy commercialization, strong cash backing, and multi-platform gene-editing upside across oncology and cardiovascular programs. CRSP’s stock price has appreciated by approximately 25.65% since our coverage. BioEquity Watch shares a similar bullish view but emphasizes Compass Pathways’ (CMPS) late-stage regulatory de-risking and psychiatry-focused pipeline rather than gene-editing expansion.
COMPASS Pathways plc is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held CMPS at the end of the first quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of CMPS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CMPS and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
