Investing in the biotechnology sector doesn’t have to be fraught with excessive risk. A case in point would be CRISPR Therapeutics (NASDAQ:CRSP), as CRSP stock offers outstanding value in a market that’s often overpriced.
CRISPR’s mission is “Creating transformative gene-based medicines for serious diseases.” The company’s pipeline of therapeutic candidates address serious conditions such as sickle-cell disease and beta thalassemia.
Clearly, this is a company that investors can root for. CRISPR is working diligently to treat potentially devastating diseases; for example, sickle-cell disease is a genetic blood disorder that’s painful and, in some cases, fatal.
But is the company in sound financial health? Stick around as we delve into CRISPR Therapeutics, a biotech bellwether that should easily impress the scientific and investing communities.
A Closer Look at CRSP Stock
Late 2020 and early 2021 were definitely thrilling times for CRISPR Therapeutics shareholders. Unfortunately, those thrills weren’t meant to last.
From November of last year until January 2021, believe it or not, CRSP stock rallied from $86 to $220.20.
That’s pretty exciting, but vertical price moves can be dangerous. As it turned out, the folks who chased after the stock near its peak price were promptly punished.
By March, CRSP stock had tumbled to the $130 area. This was followed by choppy, sideways price action and even by mid-August, the bulls had still made little to no additional progress.
On the other hand, from a valuation perspective, this stock looks highly favorable.
Currently, CRISPR Therapeutics has a trailing 12-month price–earnings ratio of 22.15. That’s quite reasonable, and it indicates that the shares have come down to an attractive level.
Easily Beating Expectations
But of course, you don’t have to buy a stock just because its price has come down.
It’s just as important to know that the company is doing well from a financial standpoint.
In the case of CRISPR Therapeutics, the company’s second-quarter performance tells a very positive tale.
Indeed, the company exceeded the analysts’ average projections by triple-digit percentages.
For Q2, CRISPR Therapeutics reported revenues of $901 million. That beat Wall Street’s mean expectations by 116%.
Furthermore, the company posted earnings per share of $9.44, surpassing Wall Street’s mean projections by a whopping 145%.
Most likely as a result of these outstanding results, analysts have had to adjust their full-year revenue expectations for CRISPR Therapeutics.
Prior to the earnings announcement, the 17 analysts covering CRISPR Therapeutics were modeling, on average, full-year 2021 revenues of $429 million.
After the announcement, however, the mean estimate jumped to $746.6 million.
Meanwhile, the average price target of Wall Street’s analysts on CRSP stock is $163. This would imply significant gains, compared with the current share price.
Pursuing Investigational Therapies
Along with the financial results, CRISPR Therapeutics also recently provided a clinical update.
CEO Samarth Kulkarni proudly proclaimed, “Updated clinical data on CTX001 presented at EHA [European Hematology Association] demonstrate consistency and durability, further validating the promise of a functional cure for sickle cell disease and beta thalassemia.”
CTX001 is an investigational gene-editing therapy that’s being evaluated for patients suffering from transfusion-dependent beta thalassemia or severe sickle cell disease.
In this therapeutic approach, the patient’s hematopoietic stem cells are edited, in order to produce high levels of fetal hemoglobin in his or her red blood cells.
Additionally, the company stated that it expects to report clinical data this year from its ongoing Phase 1 CARBON trial assessing the safety and efficacy of several dose levels of CTX110.
CTX110 is an allogeneic chimeric antigen receptor T cell investigational therapy targeting CD19, for the treatment of relapsed or refractory B-cell malignancies.
The Bottom Line
The science is moving forward quickly, and it’s exciting to consider how CRISPR Therapeutics’ investigational therapeutics could benefit many patients.
All in all, the data looks great. Yet the CRSP share price is far from its peak.
That’s not a problem at all; if anything, it provides a good opportunity for value-minded investors to take a long position in CRISPR Therapeutics today.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.