Tumbling to a price of $63.15 during today's afternoon trading session, shares of CRISPR Therapeutics AG are now -25.2% below their average target price of $84.42. Does this mean the stock will reverse course? Analysts are giving CRSP an average rating of buy and target prices ranging from 30.0 to 188.0 dollars per share.
The market, on the other hand, is a bit more pessimistic. CRISPR Therapeutics AG's short interest -- meaning the percentage of its share float that is being shorted on an expectation of a price decline -- is quite high at 22.1%. The float includes only shares that are available for public trading, and excludes preferred shares.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
Another way to gauge the sentiment on CRISPR Therapeutics AG is to look at the percentage of institutions that are invested in the stock. In this case, 66.9% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.
If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.
Overall, there is mixed market sentiment towards CRISPR Therapeutics AG because of an analyst consensus of strong upside potential, a buy rating, an unusually large proportion of its shares sold short, and an average number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about CRSP:
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It has trailing 12 month earnings per share (EPS) of $-4.47 per share
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CRISPR Therapeutics AG has a trailing 12 month Price to Earnings (P/E) ratio of -14.1 while the S&P 500 average is 15.97
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The company has a Price to Book (P/B) ratio of 2.9 in contrast to the S&P 500's average ratio of 2.95
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CRISPR Therapeutics AG is a Health Care company, and the sector average P/E and P/B ratios are 30.21 and 4.08 respectively
