The bulk of the stock’s movement last month occurred after the company posted fourth-quarter earnings results on March 14 and delivered results that fell short of the market’s expectations.
Intellia shares rose early in the month, hitting a new lifetime high as the market reacted to favorable ratings coverage and bid the stock up in anticipation of its fourth-quarter earnings report. Barclays Capital raised its price target on the stock from $33 to $46 on March 7, and JMP Securities initiated coverage on the stock on March 9 and gave the company an “outperform” rating.
With the stock trading in the neighborhood of new lifetime highs, expectations were elevated in the leadup to the company’s earnings release on March 14, and shares fell when top- and bottom-line performance came up short of the average analyst estimates. Sales for the quarter came in at $6.67 million and losses for the period came in at $0.61 per share, while the average analyst estimate had called for sales of $8.8 million and a loss of $0.44 per share.
While the stock sold off after earnings, the company’s earnings miss is probably of little significance to long-term shareholders. Intellia’s CRISPR/Cas9 gene-editing-derived treatments are still in the pre-clinical phase, and most of the interest in the stock hinges on the revolutionary potential of these experimental therapies. As such, news on whether the company is progressing toward FDA approval for clinical trials will have much more significant implications for its valuation than earnings performance in the near term.