Assessing Intellia Therapeutics After a 36.8% Drop and Gene-Editing Trial Updates

• Wondering if Intellia Therapeutics is a hidden bargain or fairly priced in today’s market? You are not alone, as the company’s prospects and value have been the subject of plenty of debates lately.
• The stock has seen a rocky ride, dropping 14.7% in the last week and plunging 36.8% over the past month. However, it still holds onto a modest 3.3% gain year-to-date.
• Recent headlines have centered around developments in gene-editing technology and updates from ongoing clinical trials. These factors have played a significant part in shaping sentiment and driving recent moves in Intellia’s share price. Some analysts believe these advancements could accelerate the path to market. Others are watching for regulatory hurdles and broader biotech sector trends.
• On our valuation checks, Intellia earns a 2 out of 6. This suggests there may be some value if you know where to look. We will break down what this means using a few common valuation tools, but there is an even better approach to valuation you will not want to miss at the end of this article.

Intellia Therapeutics scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Intellia Therapeutics Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to today’s dollars. This approach is particularly useful for companies like Intellia Therapeutics, where current profits may be volatile but future growth is anticipated.

Based on the latest data, Intellia’s Free Cash Flow (FCF) for the last twelve months was -$428.6 million. Analyst estimates suggest that, after several years of negative cash flows, Intellia’s FCF could climb to $125.7 million by 2029. Further out, longer-term projections extrapolated by Simply Wall St show FCF potentially reaching over $695 million by 2035. These figures highlight a turnaround story, moving from sizable cash outflows to strong cash generation over the next decade.

Applying the DCF model to these projections results in an estimated intrinsic share value of $97.00. Compared to Intellia’s current market price, this represents an implied discount of 87.0%, suggesting the stock is undervalued according to this method.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Intellia Therapeutics is undervalued by 87.0%. Track this in your watchlist or portfolio, or discover 839 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Intellia Therapeutics.

Approach 2: Intellia Therapeutics Price vs Sales

For companies in the biotech sector that are currently unprofitable but have promising pipelines, the Price-to-Sales (P/S) ratio is a widely used valuation metric. Unlike earnings-based metrics, P/S focuses on revenue, which can be more stable and informative for firms investing heavily in product development and clinical trials.

Growth prospects and risk levels strongly influence what counts as a “normal” or “fair” sales multiple. High-growth companies often command a higher P/S ratio, reflecting the expectation of rapid future revenue expansion. Riskier businesses typically deserve a discount.

Intellia Therapeutics currently trades at a P/S ratio of 25.6x. This is well above both the industry average of 11.3x and the average among peers, which sits at 3.7x. At first glance, this premium might seem concerning, but headline comparisons can miss crucial context about each business’s unique outlook and risk profile.

That is where Simply Wall St’s “Fair Ratio” comes in. This proprietary metric combines factors like expected revenue growth, margins, risks, market cap, and industry dynamics to suggest what a fitting sales multiple should be. Because it adjusts for company-specific details, the Fair Ratio generally provides a much more tailored and relevant benchmark than the usual one-size-fits-all comparisons.

For Intellia, the Fair Ratio is essentially flat at 0.0004x, far below its current 25.6x. This substantial difference indicates the stock is trading at a considerable premium to what would be considered fundamentally appropriate based on its risk and outlook.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1411 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Intellia Therapeutics Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a simple, powerful tool that lets you connect a company’s story and outlook directly to forecasts for its future revenue, earnings, and margins, resulting in your own fair value estimate. Narratives go beyond the numbers, allowing you to factor in your perspective on everything from pipeline breakthroughs to financial discipline or industry shifts. This links Intellia’s unique journey to its potential financial outcome.

On Simply Wall St’s Community page, millions of investors use Narratives to clarify their investment thesis and instantly see what their story means for fair value. You can use these to easily decide when to buy or sell by comparing your Fair Value to the current Price, and because Narratives update as new news or earnings are released, you are always working from the latest information. For Intellia Therapeutics, for example, one investor might see rapid clinical progress paving the way to a $106 target, while another, focused on safety challenges, might set their fair value at $7. This demonstrates how Narratives reflect different stories behind the numbers with a transparent, dynamic approach.

Do you think there's more to the story for Intellia Therapeutics? Head over to our Community to see what others are saying!

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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