Assessing CRISPR Therapeutics AG’s (NASDAQ:CRSP) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how CRISPR Therapeutics is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its biotechnology industry peers. Check out our latest analysis for CRISPR Therapeutics
Did CRSP beat its long-term earnings growth trend and its industry?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to examine different stocks in a uniform manner using new information. For CRISPR Therapeutics, its latest trailing-twelve-month earnings is -$51.4M, which, against last year’s level, has become less negative. Given that these figures may be relatively myopic, I have computed an annualized five-year figure for CRISPR Therapeutics’s earnings, which stands at -$34.7M. This means CRISPR Therapeutics has historically performed better than recently, although it seems like earnings are now heading back towards a more favorable position once more.We can further analyze CRISPR Therapeutics’s loss by looking at what’s going on in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the last few years has more than doubled, indicating that CRISPR Therapeutics is in a high-growth phase with expenses racing ahead elevated top-line growth rates, leading to yearly losses. Inspecting growth from a sector-level, the US biotechnology industry has been growing its average earnings by double-digit 11.07% over the prior year, and 20.18% over the past five. This means that any tailwind the industry is deriving benefit from, CRISPR Therapeutics has not been able to reap as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues CRISPR Therapeutics may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research CRISPR Therapeutics to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for CRSP’s future growth? Take a look at our free research report of analyst consensus for CRSP’s outlook.
2. Financial Health: Is CRSP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.