On Friday, Evercore ISI made an adjustment to the price target for Editas Medicine (NASDAQ:EDIT), reducing it to $5.00 from the previous $7.00. Despite the lowered target, the firm continues to hold an Outperform rating on the stock.
The assessment follows Editas Medicine's recent decision to restructure and discontinue its reni-cel program, a move that is projected to cost around $80 million. According to InvestingPro data, the stock has seen a steep 82% decline over the past year, with analyst targets ranging from $1 to $13.
The analyst noted that Editas Medicine's market capitalization stands at $127 million, which is significantly below its cash position of $322 million, even after accounting for the restructuring expenses. This valuation suggests that the stock is currently trading at a substantial discount. InvestingPro analysis confirms the company's strong liquidity position, with a current ratio of 3.75 and more cash than debt on its balance sheet, though it's worth noting the company is quickly burning through its cash reserves.
There are no major expectations for clinical development updates from Editas Medicine in the near future, with the next significant insights anticipated to emerge in early 2025. At that time, the company is expected to provide more clarity on potential indications for its CRISPR technology.
However, the possibility of licensing deals for its CRISPR technology and the potential for merger and acquisition activity present opportunities for investors. For deeper insights into Editas Medicine's financial health and prospects, investors can access the comprehensive Pro Research Report, along with 16 additional ProTips available on InvestingPro.
The analyst's commentary suggests that for investors who are willing to take a long-term approach and can afford to wait, purchasing the stock at its current low price could be a strategic move.
However, for those not inclined to hold onto the stock for an extended period, it may not be the right choice. With a beta of 1.87, the stock shows higher volatility than the broader market, and analysts anticipate a sales decline in the current year. Editas Medicine has not provided any public response to the price target adjustment.
In other recent news, Editas Medicine has had significant developments. The company announced a halt in the development of its reni-cel program and a workforce reduction of 65%. This strategic shift focuses entirely on in vivo gene editing efforts, extending its financial runway into the second quarter of 2027. Analyst firms have adjusted their positions in response to these changes. Chardan Capital Markets downgraded Editas Medicine's stock to Neutral, while Truist Securities and Stifel downgraded the stock from Buy to Hold.
Despite these adjustments, Editas Medicine reported preclinical success in hematopoietic stem cells (HSCs) gene editing, which could potentially treat sickle cell disease and beta thalassemia. This success, along with the company's strong liquidity position, led to analyst upgrades from BofA Securities and Evercore ISI to Buy and Outperform respectively.
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