Wall Street Analysts See CRISPR Therapeutics (CRSP) as a Buy: Should You Invest?

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on CRISPR Therapeutics AG (CRSP), and highlights the potential misalignment of interests between brokerage analysts and retail investors [1][5][10]. Group 1: Brokerage Recommendations for CRISPR Therapeutics - CRISPR Therapeutics has an average brokerage recommendation (ABR) of 1.92, indicating a consensus between Strong Buy and Buy, based on 28 brokerage firms [2]. - Out of the 28 recommendations, 15 are classified as Strong Buy, while one is classified as Buy, representing 53.6% and 3.6% of total recommendations respectively [2]. Group 2: Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations may not effectively guide investors in selecting stocks with the highest price increase potential [5]. - Brokerage firms often exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell recommendations [6][10]. Group 3: Zacks Rank as an Alternative Indicator - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, which are more reliable indicators of near-term stock price performance compared to ABR [8][11]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, unlike the potentially outdated ABR [13]. Group 4: Current Earnings Estimates for CRISPR Therapeutics - The Zacks Consensus Estimate for CRISPR Therapeutics remains unchanged at -$6.57 for the current year, suggesting stable analyst views on the company's earnings prospects [14]. - Due to the unchanged consensus estimate, CRISPR Therapeutics holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [15].