CRISPR Therapeutics Stock Before Q4 Earnings: To Buy or Not to Buy?

CRISPR Therapeutics CRSP is expected to report fourth-quarter and full-year 2024 earnings later this month. The Zacks Consensus Estimate for quarterly sales is pegged at $10.13 million, while that for earnings is pinned at a loss of $1.15 per share. Estimates for the company’s 2025 loss per share have increased from $5.17 to $5.21 in the past 30 days.See the Zacks Earnings Calendar to stay ahead of market-making news. Image Source: Zacks Investment ResearchCRSP’s Earnings Surprise HistoryThe biotech firm’s performance has been decent over the past four quarters. Its earnings beat estimates in three of the trailing four quarters and met the mark on one occasion, delivering an average surprise of 100.64%. In the last reported quarter, CRISPR’s earnings beat expectations by 24.06%. Image Source: Zacks Investment ResearchWhat Our Model Predicts for CRSPOur proven model predicts an earnings beat for CRISPR Therapeutics this time around. The combinationofa positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.Earnings ESP: CRISPR Therapeutics has an Earnings ESP of +8.09%. The Most Accurate Estimate stands at a loss of $1.06 per share, while the Zacks Consensus Estimate is pegged at a loss of $1.15.Zacks Rank: CRSPcurrently carriesa Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping CRSP’s Upcoming ResultsCRISPR Therapeutics’ top line currently includes grants and collaboration revenues from its partnership with large-cap biotech Vertex Pharmaceuticals VRTX.CRSP and partner VRTX’s one-shot gene therapy, Casgevy, was approved in late 2023/early 2024 for two blood disorders — sickle cell disease and transfusion-dependent beta-thalassemia (TDT) — in the United States and Europe. Under the terms of the 2021 agreement, Vertex leads the global development and commercialization of Casgevy with support from the company.Casgevy is the first marketed product in CRSP’s portfolio. Though the therapy’s launch activities are already underway in several countries, we expect management to have started recording Casgevy sales in the fourth quarter. Our model estimates for CRISPR’s share of the gene therapy sales are pegged at $10 million. We also expect management to provide some more updates on the commercial progress of the therapy on the upcoming earnings call.Apart from Casgevy, CRISPR Therapeutics is pursuing the development of CRISPR candidates to create novel CAR-T cell therapies. Management is currently focused on the development of two next-generation CAR-T therapy candidates — CTX112 (targeting CD19-positive B-cell malignancies) and CTX131 (targeting relapsed or refractory solid tumors) — in separate phase I/II studies. It is also evaluating these candidates in other early-stage studies — one evaluating CTX131 for hematological malignancies and the other evaluating CTX112 in systemic lupus erythematosus indication. Updates from all these studies are expected throughout this year.Apart from immuno-oncology candidates, CRSP is currently studying its first two in-vivo candidates, CTX310 and CTX320, in separate phase I clinical studies targeting ANGPTL3 and lipoprotein(a), respectively.Activities related to developing the company’s pipeline candidates are likely to have escalated operating expenses in the to-be-reported quarter.Nevertheless, asingle quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether it would be a prudent move to buy, sell, or hold the stock at present.CRSP’s Stock Price Performance & ValuationIn the past year, thestock has plunged 41% compared with the industry’s7% decline. It has also underperformed the broader Medical sector and the S&P 500 Index. However, CRISPR’s shares are currently trading below its 50-day and 200-day moving averages.CRSP Stock Underperforms Industry, Sector & S&P 500 Image Source: Zacks Investment ResearchFrom a valuation standpoint, CRSP appears attractive relative to the industry. Going by the price/book ratio, the company’s shares currently trade at 1.79, trailing 12-month book value, which is less than 3.71 for the industry. Image Source: Zacks Investment ResearchOur Investment Thesis on CRSP StockWhile CRISPR’s pipeline is still in early-stage development, we believe that with Casgevy’s approval, the company has now crossed its biggest hurdle — the lack of a stable revenue stream. The arduous treatment process is likely a reason for the delay in recording product revenues – administration of Casgevy requires the fulfillment of many conditions, including stem-cell collection, their subsequent modification and patient infusion.Casgevy’s approval also gives CRSP an edge over rivals Beam Therapeutics BEAM and Intellia Therapeutics NTLA, which are also developing CRISPR-based therapies but are still in clinical development. CRISPR Therapeutics is the first and currently the only company to market an approved therapy based on this technology. Partnership with Vertex, which has a well-established commercial supply chain, also gives Casgevy an encouraging head start.Stay Invested in CRSP StockWe would suggest holding on to this stock for now, considering its growth prospects. Unlike last year where there was a lack of pipeline updates, CRSP is expected to provide an update on nearly all its pipeline candidates throughout this year.We also expect the upcoming results to be a major catalyst for CRSP — this should be the first quarter when management starts recording revenues from Casgevy. It should also provide us with an insight into the demand and market potential for the therapy.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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