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Is a Beat in Store for CRISPR (CRSP) This Earnings Season?

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CRISPR Therapeutics AG (CRSP - Free Report) is scheduled to report third-quarter 2018 results later this month.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 26.15%. Moreover, CRISPR has a mixed track record as it has topped estimates in the last two quarters, while missed in the other two, with an average positive earnings surprise of 19.50%.

CRISPR’s shares have outperformed the industry so far this year. The stock has gained 38.1%, against the industry’s decline of 0.4%.

What Our Model Indicates

Our proven model shows that CRISPR is likely to beat on earnings in the to-be-reported quarter because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: CRISPR has an Earnings ESP of +3.53% as the Zacks Consensus Estimate is pegged at a loss of 74 cents, while the Most Accurate Estimate is pegged at a loss of 71 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CRISPR carries a Zacks Rank #1, which when combined with the positive Earnings ESP makes us reasonably confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

Let's see how things are shaping up for this announcement.

Factors Likely to Impact Q3 Results

CRISPR is a leading gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR or Clustered Regularly Interspaced Short Palindromic Repeats is one of the most exciting developments in gene editing. The technology can selectively delete, modify or correct a disease causing abnormality in a specific DNA segment.

The company and partner Vertex Pharmaceuticals Incorporated (VRTX - Free Report) announced that the FDA in October 2018 lifted the clinical hold and accepted the Investigational New Drug application (IND) for CTX001 for the treatment of sickle cell disease (SCD). In May 2018, the FDA placed a clinical hold on the IND pending the resolution of certain questions as part of its review of the same. The companies are on track to initiate a phase I/II clinical study in SCD by the end of 2018, and are currently enrolling patients with transfusion dependent β-thalassemia in a phase I/II studies in β-thalassemia in Europe.

CRISPR is also advancing two additional allogeneic CAR-T candidates, targeting BCMA for multiple myeloma, and CD70 for both hematologic malignancies and solid tumors. 

We expect updates on these pipeline candidates in the third-quarter call.

The company expects its existing cash to fund its operating expenses and capital expenditures for at least the next 24 months. This excludes any additional proceeds it may receive under its collaboration agreement, and joint development and commercialization agreement with Vertex, and the agreements related to Casebia and any other capital raising transactions that the company may complete.

CRISPR THERAPTC Price and EPS Surprise

 

CRISPR THERAPTC Price and EPS Surprise | CRISPR THERAPTC Quote

Other Stocks That Warrant a Look

Here are some other stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

AMAG Pharmaceuticals Inc. is expected to report third-quarter results on Nov 1. The company has an Earnings ESP of +13.76% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alnylam Pharmaceuticals Inc. (ALNY - Free Report) is expected to report third-quarter earnings on Nov 6. The company has an Earnings ESP of +12.54% and a Zacks Rank of 3.

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