CRSP - Crispr Therapeutics Futurism-Turning-Commercial Defies 'Valuation' (Technical Analysis)
2024-06-10 10:27:19 ET
Summary
- CRISPR Therapeutics’ new gene-editing protocol gives it a legitimate claim to be the future of medicine.
- That powered the stock back in 2020-21.
- But at some point, it’ll take revenues and profits, not futurism to justify stock ownership.
- The in-progress launch of Casgevy, a gene-editing treatment for Sickle Cell Disease suggests that transition is closing in.
- But that’s still getting off the ground, making numbers hard to project, and leaving room for disappointments.
Back around early 2022, my boss at my last company urged me to write a bullish recommendation for CRISPR Therapeutics (CRSP) .
I never heard of it. But that was ok. I love using quant screens and ratings to discover exciting new ideas. And our model favored CRSP.
So, I looked… And I nearly spit my coffee all over my keyboard. This was a no-serious-financials R&D shop. How, I wondered, could our model possibly flash a green light?
I quickly understood.
Imagine a company goes from little or no revenue in one period to massive revenue in the next. That’ll compute to a massive growth rate. And it’ll exert bullish pressure on a quant model that works with growth.
That’s an example of the kinds of things I was seeing with CRSP.
This is that ever-present challenge to quant investing. Sometimes numbers meet the letter of the law, but not its spirit....
Crispr Therapeutics, Futurism-Turning-Commercial, Defies 'Valuation' (Technical Analysis)