We're Not Very Worried About CRISPR Therapeutics' (NASDAQ:CRSP) Cash Burn Rate

editorial-team@simplywallst.com (Simply Wall St)

Wed, May 7, 2025, 4:18 AM 4 min read

Just because a business does not make any money, does not mean that the stock will go down. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.

So, the natural question for CRISPR Therapeutics (NASDAQ:CRSP) shareholders is whether they should be concerned by its rate of cash burn. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

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Does CRISPR Therapeutics Have A Long Cash Runway?

A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. When CRISPR Therapeutics last reported its December 2024 balance sheet in February 2025, it had zero debt and cash worth US$1.9b. In the last year, its cash burn was US$145m. That means it had a cash runway of very many years as of December 2024. Importantly, though, analysts think that CRISPR Therapeutics will reach cashflow breakeven before then. If that happens, then the length of its cash runway, today, would become a moot point. The image below shows how its cash balance has been changing over the last few years.

debt-equity-history-analysis — NasdaqGM:CRSP Debt to Equity History May 7th 2025

View our latest analysis for CRISPR Therapeutics

How Well Is CRISPR Therapeutics Growing?

We reckon the fact that CRISPR Therapeutics managed to shrink its cash burn by 47% over the last year is rather encouraging. But we are made wary by the 90% dive in operating revenue over the same period. Considering both these metrics, we're a little concerned about how the company is developing. While the past is always worth studying, it is the future that matters most of all. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

Can CRISPR Therapeutics Raise More Cash Easily?

CRISPR Therapeutics seems to be in a fairly good position, in terms of cash burn, but we still think it's worthwhile considering how easily it could raise more money if it wanted to. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Many companies end up issuing new shares to fund future growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.

CRISPR Therapeutics' cash burn of US$145m is about 4.5% of its US$3.2b market capitalisation. That's a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money.

So, Should We Worry About CRISPR Therapeutics' Cash Burn?

As you can probably tell by now, we're not too worried about CRISPR Therapeutics' cash burn. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. Although we do find its falling revenue to be a bit of a negative, once we consider the other metrics mentioned in this article together, the overall picture is one we are comfortable with. Shareholders can take heart from the fact that analysts are forecasting it will reach breakeven. Considering all the factors discussed in this article, we're not overly concerned about the company's cash burn, although we do think shareholders should keep an eye on how it develops. Taking an in-depth view of risks, we've identified 1 warning sign for CRISPR Therapeutics that you should be aware of before investing.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.