CRISPR Therapeutics (CRSP): Assessing Valuation After Recent Share Price Volatility

CRISPR Therapeutics (CRSP) shares have shown some movement lately, dipping around 5% in the latest session and down over 31% for the past month. Investors are now watching to see if new developments emerge that could shift the trend.

See our latest analysis for CRISPR Therapeutics.

Zooming out, CRISPR Therapeutics’ 1-day and 1-month share price returns show short-term volatility. Its year-to-date climb of 22.45% suggests momentum has shifted higher compared to last year’s slower stretch, with a 1-year total shareholder return of 7.34%.

If recent market swings have you curious about other biotech opportunities, take the next step and discover See the full list for free.

But with CRISPR Therapeutics now trading well below analyst price targets and revenue growth surging, the big question is whether the market is undervaluing the stock or if all future gains are already reflected in the share price.

Price-to-Book of 2.5x: Is it justified?

CRISPR Therapeutics is trading at a price-to-book (P/B) ratio of 2.5x, exactly in line with the US biotechs industry average. This suggests the market sees the company valued similarly to its sector peers on a book value basis.

The price-to-book ratio compares a company's market price to its net asset value, offering a lens on how the market values its tangible assets. For biotech firms like CRISPR Therapeutics, this metric is particularly relevant as it anchors valuation to the company’s tangible assets rather than profitability, which can be volatile in this sector.

However, the same 2.5x multiple as the broader biotech field raises questions about whether the market is appropriately pricing CRISPR Therapeutics’ unique risks and growth profile, especially given its steep revenue expansion but ongoing lack of profitability.

Measured purely by P/B, CRISPR Therapeutics appears neither undervalued nor overvalued relative to its direct competitors. The real takeaway may lie in the company’s rapid growth versus persistent losses, a tension the market seems to be weighing carefully at this value level.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book of 2.5x (ABOUT RIGHT)

However, persistent net losses and past underperformance over three and five years could challenge the view that CRISPR Therapeutics is fairly valued at this time.

Find out about the key risks to this CRISPR Therapeutics narrative.

Another View: What Does Our DCF Model Suggest?

While the price-to-book ratio paints a picture of CRISPR Therapeutics being in line with industry norms, our SWS DCF model takes a different approach. It estimates a fair value of $128.36 per share, which is much higher than the current market price. Is the market overlooking long-term potential, or is there a reason for skepticism?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CRISPR Therapeutics for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 897 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CRISPR Therapeutics Narrative

If you see the data differently or want to dig deeper, you can craft your own CRISPR Therapeutics story in just a few minutes. So why not Do it your way?

A great starting point for your CRISPR Therapeutics research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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