Will CRISPR Stock Rebound After A 10% Fall In A Week?

[Updated 7/8/2021] CRSP Stock Update

The stock price of CRISPR Therapeutics (NASDAQ:CRSP), a biotechnology gene editing company focused on developing gene-based medicines for human diseases, reached an all-time high of $210 in January of this year before a larger sell-off in the gene-editing companies drove the stock price down nearly 32% to its current level of around $142. CRSP stock has fallen 10% over the last five days. But will the company’s stock continue its downward trajectory over the coming weeks, or is a recovery in the stock imminent?

According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for CRISPR stock average a little under 7% in the next one-month (twenty-one trading days) period after experiencing a 10% drop over the previous week (five trading days).

But how would these numbers change if you are interested in holding CRISPR stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test CRISPR stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF CRSP stock moved by -5% over five trading days, THEN over the next twenty-one trading days CRSP stock moves an average of 6.4%, with a 60% probability of a positive return over this period.

Some Fun Scenarios, FAQs & Making Sense of CRISPR Therapeutics Stock Movements:

Question 1: Is the average return for CRISPR Therapeutics stock higher after a drop?

Answer: Consider two situations,

Case 1: CRISPR Therapeutics stock drops by -5% or more in a week

Case 2: CRISPR Therapeutics stock rises by 5% or more in a week

Is the average return for CRISPR Therapeutics stock higher over the subsequent month after Case 1 or Case 2?

CRSP stock fares better after Case 2, with an average return of 6.6% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 6.9% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how CRISPR Therapeutics stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold CRISPR Therapeutics stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For CRSP stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for CRISPR Therapeutics after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although CRSP stock appears to be an exception to this general observation.

It’s pretty powerful to test the trend for yourself for CRISPR Therapeutics stock by changing the inputs in the charts above.

[Updated 6/14/2021] CRSP Stock Rise

The stock price of CRISPR Therapeutics (NASDAQ:CRSP), a biotechnology gene editing company focused on developing gene-based medicines for human diseases, has seen a solid 26% rise over the last twenty-one trading sessions, and we believe that the stock may continue to rally upward in the near term. Last week, CRSIPR announced positive data from clinical trials for CTX001, a potential one-time therapy being developed by Vertex Pharmaceuticals and CRISPR for patients suffering from transfusion-dependent beta thalassemia (TDT) and severe sickle cell disease (SCD). Usually, beta thalassemia patients depend on regular blood transfusions, while sickle cell disease patients experience vaso-occlusive crises (VOCs). After being treated by CTX001, none of the patients with TDT required transfusions, and all of the SCD patients were free of VOCs. This is an important development for CRISPR, and the company last month said that Vertex would pay it $900 million for an additional 10% of the profits from sales of CTX001. If approved, CTX001 will be a blockbuster drug.

Now that CRSP stock has seen a rise of 26% in twenty-one trading days, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a 60% chance of a rise in CRSP stock over the next month. Out of 189 instances in the last five years that CRISPR stock saw a twenty-one day rise of 26% or more, 113 of them resulted in CRSP stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 113 out of 189, or about 60% chance of gain in CRSP stock over the coming month. Despite a 26% rise over the last month or so, CRSP stock is still down 20% year-t0-date. A few months back we discussed that investors may get better levels to enter CRSP stock after it surged 3x from levels of $62 in June 2020 to $210 in January 2021. CRSP stock is now down 40% from its January highs, and we believe that the stock will rise in the near term. See our analysis on CRISPR Stock Chances of Rise for more details.

Twenty-One Days: CRSP 26%, vs. S&P500 4.7%; Outperformed market

(15% likelihood event; 60% probability of rise over next 21 days)

• CRISPR Therapeutics stock rose 26% the last twenty-one trading days (one month), compared to the broader market (S&P500) rise of 4.7%
• A change of 26% or more over twenty-one trading days is a 15% likelihood event, which has occurred 189 times out of 1283 in the last five years
• Of these 189 instances, the stock has seen a positive movement over the next twenty-one trading days on 113 occasions
• This points to a 60% probability for the stock rising over the next twenty-one trading days

Five Days: CRSP 12%, vs. S&P500 0.6%; Outperformed market

(12% likelihood event; 55% probability of rise over next five days)

• CRISPR Therapeutics stock rose 12% over a five-day trading period ending 6/11/2021, compared to the broader market (S&P500) rise of 0.6%
• A change of 12% or more over five trading days (one week) is a 12% likelihood event, which has occurred 158 times out of 1284 in the last five years
• Of these 158 instances, the stock has seen a positive movement over the next five trading days on 87 occasions
• This points to a 55% probability for the stock rising over the next five trading days

[Updated 3/26/2021] CRSP Update

Last month, we talked about why investors may want to wait for better levels to enter into the CRSP stock. Since then, the stock has seen a correction of over 28%. There has been no major development to cause any panic among investors. But the large 5x rally from $34 in March 2020 to $160 last month likely resulted in profit booking at higher levels. While the stock is still up 3x from March 2020 lows, the levels now appear attractive to enter for long-term investors.

Looking at the recent decline, the 14% drop for CRSP stock over the last ten days compares with a 1% drop seen in the broader S&P 500 index. Looking forward, based on our machine learning analysis of trends in the stock price over the last few years, we believe that there is a 59% chance of a rise in CRSP stock over the next month (twenty-one trading days). Out of 197 instances in the last 4 years that CRISPR Therapeutics (CRSP) stock saw a 5-day decline of 7.3% or more, 112 of them resulted in CRSP stock rising over the subsequent one month period (21 trading days). This historical pattern reflects 112 out of 197, or about 59% chance of gain in CRSP stock over the coming month. See our analysis on CRISPR Stock Chances of Rise for more details.

[Updated 2/17/2021] Buy Or Fear CRISPR Stock After Q4?

A few months back we talked about why the rally in CRSP stock may continue given the positive developments around CTX001, an experimental gene therapy for people with sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). CRSP stock extended its rally from levels of around $107 in mid-November 2020 to $161 currently. Also, the stock has rallied a stellar 5x from levels of $34 in late March 2020 – when markets made a bottom following the spread of Covid-19. Now, can the rally continue? We don’t think so. Though the CRSP stock has momentum on its side, given the strong 5x rally in less than a year, investors may want to wait for better levels to enter into the stock.

Looking at the recently announced Q4 numbers, revenues of $0.4 million were down 99.5% y-o-y and missed the consensus by $2.2 million. Note that 2019 revenues were higher due to collaboration revenues from Vertex Pharmaceuticals in connection with co-development of CTX001. The company’s Q4 GAAP EPS of $(1.50) missed the estimates by $0.23. Given the results being below the street estimates, and the stock sitting on a massive rally, CRISPR appears to be vulnerable to downside risk in the near term. Curious about the possibility of rising over the next quarter? Check out the CRSP Stock AI Dashboard: Chances Of Rise And Fall for a variety of scenarios on how CRSP stock could move.

[Updated 11/17/2020] CRISPR Stock Rally

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 (RPS) 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 in connection with co-development of CTX001, an experimental gene therapy for people with sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). So with barely any revenues this year, what’s the buzz around CRISPR stock, given it has rallied 3x over the recent months? It all boils down to its pipeline. The company is working to mass-produce cell therapies that will work in any person. Currently, cell therapies are manufactured from cells derived from human donors or from a patient’s own cells, making the process lengthy and cumbersome to develop the medication. If CRISPR is successful in its approach, it would mean off-the-shelf cell-based medicines developed using cells from diverse group of donors. The company’s in-house CTX110 therapy for non-Hodgkin’s lymphoma has seen positive results from phase 1 trials. The CTX001, which the company is co-developing with Vertex has received Rare Pediatric Disease designation from the U.S. FDA. Overall, CRISPR stock’s value is something to be looked at purely from its potential pipeline. CTX110 alone if approved could garner sales over $1.5 billion. The estimated revenues for 2020 and 2021 are $2.5 million and $12.7 million.

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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