Editas Medicine Stock Forecast
Editas Medicine, Inc., a clinical stage genome editing company, focuses on developing transformative genomic medicines to treat a range of serious diseases. Editas Medicine's mission is to translate its genome editing technology into a novel class of human therapeutics that enable precise and corrective molecular modification to treat the underlying cause of a broad range of diseases at the genetic level. Editas Medicine is in the discovery stage of developing CRISPR gene edit treatments for the following conditions: Leber Congenital Amaurosis 10, Usher Syndrome 2a, HSV-1, T Cells for cancer treatments, Beta Thalassemia, Sickle Cell, Cystic Fibrosis, and Alpha-I Antitrypsin Deficiency.
Who founded Editas medicine?
Editas Medicine was previously founded under the name Gengine by Feng Zhang, George Church, Keith Joung, David Liu all from The Broad Institute at MIT and Harvard along with Jennifer Doudna from the University of California, Berkeley. Jennifer Doudna left and co-founded Intellia Therapeutics.
The company's five founders have published much of the foundational work that has elevated genome editing technology to a level where it can now be optimized and developed for therapeutic use. The company has generated substantial patent filings and has access to intellectual property covering foundational genome editing technologies, as well as essential advancements and enablements that will uniquely allow the company to translate early findings into viable human therapeutic products.
Who invested in Editas?
How do you pick the next stock to invest in? An easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don't always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Editas Medicine, Inc. (NASDAQ:EDIT).
Editas was founded in 2013 with $43 million in Series A venture capital financing led by leading health care venture capital firms Flagship Ventures, Polaris Partners and Third Rock Ventures with participation from Partners Innovation Fund. They have raised a total of $656.6M in funding over 5 rounds. Their latest funding was raised on Jan 21, 2021 from a Post-IPO Equity round.
Have you ever been surprised when a price of an equity instrument such as Editas Medicine is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Editas Medicine backward and forwards among themselves. The largest stake in Editas Medicine was held by ARK Investment Management, with 10.54% of shares outstanding. The second and third largest shareholders, hold 9.51% and 8.2%, of the shares outstanding, respectively. Top 12 shareholders own 50% of the company, meaning that no single shareholder has a majority interest in the ownership.
What is Editas Medicine Current Valuation?
In the same way as Intellia, Editas Medicine also uses the CRISPR technology for its gene therapy development pipeline. Is Editas Medicine undervalued compared to its fair value and its price relative to the market?
Editas Medicine is rated as one of the top companies in current valuation category among related companies. In accordance with the recently published financial statements, Editas Medicine has a Current Valuation of 3.24 B. This is 77.44% lower than that of the Healthcare sector and 30.25% lower than that of the Biotechnology industry. The current valuation for all United States stocks is 80.51% higher than that of the company.
As of October 2021, Editas Medicine has a market cap of $2.72 Billion and an enterprise value of about $2.2 Billion. At this time, the firm appears to be undervalued. Editas Medicine's annual market cap increased from Dec. 2018 ($1,109.26 Mil) to Dec. 2019 ($1,609.48 Mil) and increased from Dec. 2019 ($1,609.48 Mil) to Dec. 2020 ($4,386.33 Mil).
Is Editas Medicine a risky investment?
When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We can see that Editas Medicine does use debt in its business. But the real question is whether this debt is making the company risky.
Editas is in an excellent financial position with more than $600 million in cash and equivalents and no debt whatsoever. This results in cash-per-share (CPS) ratio of 9.23. Succinctly put, Editas Medicine boasts net cash, so it's fair to say it does not have a heavy debt load!
Editas Medicine’s impressive intellectual property portfolio makes it one of the leading future contenders in the gene-editing market. The company currently has 220 patents protecting its genetic engineering technology, with an additional 800 patents pending review. Perhaps that is why nearly 75% of all outstanding shares are held by institutions like hedge and mutual funds. Large investment firms usually have dedicated teams of analysts and medical experts who conduct ample due diligence on whether a firm's experimental drug can make it to approval before initiating a position.
Shares outstanding: 68.15m
Real Value: $47.31 per share
Probability Of Bankruptcy: 3%
Z Score: 51.6
Book Value Per Share: 9.46 X
