Celebrations may be in order for CRISPR Therapeutics AG (NASDAQ:CRSP) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for next year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
Following the latest upgrade, the current consensus, from the 15 analysts covering CRISPR Therapeutics, is for revenues of US$15m in 2021, which would reflect a painful 80% reduction in CRISPR Therapeutics' sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$14m in 2021. The consensus has definitely become more optimistic, showing a solid increase in revenue forecasts.
Additionally, the consensus price target for CRISPR Therapeutics increased 34% to US$138, showing a clear increase in optimism from the analysts involved. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values CRISPR Therapeutics at US$180 per share, while the most bearish prices it at US$45.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 80% revenue decline a notable change from historical growth of 73% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 21% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CRISPR Therapeutics is expected to lag the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for next year. They're also anticipating slower revenue growth than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at CRISPR Therapeutics.
But wait - there's more! At least one of CRISPR Therapeutics' 15 analysts has provided estimates out to 2024, which can be seen for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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