Can Sangamo Therapeutics Stock Rebound After A 17% Drop Following Q4 Miss?

The stock price of Sangamo Therapeutics (NASDAQ: SGMO), a biotechnology company that focuses on multiple areas in the genomic medicine space, including gene therapy, cell therapy, in vivo genome editing, and in vivo genome regulation, has seen a 17% drop over the last ten trading days, while it’s down 11% over the last five trading days. But we believe the stock, after the recent drop, may trend higher in the near term. The recent drop can largely be attributed to the company’s Q4 loss of $0.29 per share which was below the consensus estimate of $0.18 loss per share. This can be attributed to the higher operating expenses, which the company stated were due to expansion of its facilities to support the advancement of clinical trials.

Looking at the recent decline, the 17% drop for SGMO stock over the last ten days compares with a 2.5% drop seen in the broader S&P 500 index. Now, is SGMO stock poised to decline further? It doesn’t look that way. The company has a robust pipeline to support its long-term growth, with its treatment for Hemophilia A, which is being developed with Pfizer
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and is in phase 3 trials. The company also has four candidates in the phase 1/2 stage and 13 in the Preclinical stage. Now, the stock has already corrected around 35% from levels of over $17 seen in early January 2021, and after the recent drop, SGMO stock now trades at levels of around $11, compared to the $20 consensus average price for the stock, implying a potential premium of a solid 80%. Furthermore, based on our machine learning analysis of trends in the stock price over the last few years, we believe that there is a strong chance of a rise in SGMO stock over the next month (twenty-one trading days). See our analysis on Sangamo Therapeutics Stock Chances of Rise for more details.

Five Days: SGMO -11%, vs. S&P500 -2.4%; Underperformed market

(11% likelihood event)

• Sangamo Therapeutics stock declined 11% over a five-day trading period ending 3/3/2021, compared to the broader market (S&P500) decline of 2.4%
• A change of -11% or more over five trading days is a 11% likelihood event, which has occurred 137 times out of 1256 in the last five years

Ten Days: SGMO -17%, vs. S&P500 -2.5%; Underperformed market

(9% likelihood event)

• Sangamo Therapeutics stock declined 17% over the last 10 trading days (2 weeks), compared to broader market (S&P500) decline of 2.5%
• A change of -17% or more over 10 trading days is a 9% likelihood event, which has occurred 119 times out of 1240 in the last five years

While SGMO stock may see a rebound, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Abbott vs. Corcept.

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