Here’s Why You Should Stay Invested In CRISPR Stock Despite The Recent 3x Rally – Forbes
Despite a large 3x rise since the March 23 lows of this year, at the current price of around $107 per share we believe CRISPR Therapeutics stock (NASDAQ: CRSP), a biotechnology gene editing company focused on developing gene-based medicines for human diseases, has more room for growth in the near term. CRSP stock has rallied from $34 to $107 off the recent bottom compared to the S&P which moved 60% over the same period, with the resumption of economic activities as lockdowns are gradually lifted. CRSP stock is also up 4.5x from levels seen in early 2018, over two years ago.
Some of the 4x rise of the last 2 years is justified by the roughly 7x growth seen in CRISPR’s revenues from 2017 to 2019, while its revenue per share grew 5x to $5.32 in 2019, compared to $1.02 in 2017. This mismatch can be attributed to a 36% uptick in total shares outstanding due to share issuances. Despite the growth in RPS, the company’s P/S Multiple saw a contraction. We believe the stock is likely to see upside despite the recent uptick and the potential weakness from a recession-driven by the Covid outbreak. Our dashboard, ‘What Factors Drove 350% CRISPR Therapeutics Stock between 2017 and now?‘, has the underlying numbers.
CRISPR’s P/S multiple changed from 23x in 2017 to 11x in 2019. While the company’s P/S is 20x now (based on trailing RPS), there is a potential upside given the expected growth in RPS over the coming years, as we discuss below.
So what’s the likely trigger and timing for upside?
There’s not much to look at CRISPR’s Q3 sales of $0.2 million, which compares with $212 million in the prior year quarter, which included collaboration revenues from Vertex Pharmaceuticals
CRISPR is a high growth stock and it comes with a high risk as well. There could be a case where the therapies in CRISPR’s pipeline aren’t found effective. Also, we don’t know the timeline of when the products will be ready to be sold. That said, investors willing to be patient will likely be rewarded with any positive data from clinical trials for these therapies
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Published at Wed, 18 Nov 2020 13:00:00 +0000