Biotech stocks have the potential for huge gains if a product or drug is deemed effective and safe, but investing in the shares of those companies can be volatile.
Cathie Wood and her flagship ARK Innovation ETF ARKK fund favored Crispr Therapeutics AG CRSP in 2021, buying up millions of shares of the biotech company backed by Meta Platforms Inc META CEO Mark Zuckerberg and Alphabet Inc GOOGLGOOG co-founder Sergey Brin.
Though Wood has sold some of the position, Crispr is still the ninth heaviest stock in the ARKK portfolio, with around 5.7 million shares.
Speculative investors and tech leaders aside, The Mercator analyst Gianni Di Poce sees 51% upside potential in the bio stock; here’s why.
The call: “I am bullish on CRSP so long as the stock remains above $69-$70,” Di Poce said. “Upside target $119-$121.”
The analyst penned in his weekly Benzinga Pro Insider Report that the company’s revenue soared to $914.9 million in 2021, up from just $719,000 in 2020. “With that growth trajectory,” he wrote, “valuation of the stock is not based on traditional fundamental metrics, but rather a belief in the story that gene editing will be a big part of our future.”
Despite fundamental headwinds, the chart is showing a tight consolidation just under resistance of a rounding bottom pattern.
According to Emergen Research, the global gene editing market size was $5.2 billion in 2020 and is expected to reach $18.5 billion in 2028.
Crispr CEO Samarth Kulkarni said in the company’s Aug. 8 earnings call that the company remains in a strong position to bring transformative medicines for patients suffering from serious diseases.
“CRSPR has key drugs in its development pipeline, including one to treat sickle cells,” Di Poce said. “The stock is one FDA approval away from a burst higher in prices.”
Other analyst calls: Credit Suisse recently maintained its Neutral rating on Crispr, while RBC Capital maintained sector perform.
Photo: iQoncept via Shutterstock
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