Why Beam Therapeutics Stock Tanked on Tuesday

Precision gene-editing company Beam Therapeutics (NASDAQ: BEAM) had a Tuesday to forget on the stock market. Following the release that morning of its latest set of quarterly results, the shares raced downwards to a more than 19% loss on the day. By comparison, the S&P 500 (SNPINDEX: ^GSPC) dipped by only 0.8% that trading session.

The top line found wanting

Beam, which is still in the clinical stage, earned slightly under $7.5 million in its first quarter of the year on license and collaboration revenue. That was largely flat year over year. With an uptick in expenses, the company's net loss deepened, landing at over $109 million ($1.24 per share) against the less than $99 million deficit in the first quarter of 2024.

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Analysts were expecting a far higher top-line figure; on average, they were modeling slightly over $13.9 million. Beam also missed on the bottom line, although not as badly, since the consensus pundit estimate was for a loss of $1.21 per share.

Beam's specialty is base editing, a form of gene editing in which a mutation is effectively erased instead of being sliced out. The technology underpins all of Beam's pipeline programs, the most advanced of which is its BEAM-101 treatment for sickle cell disease.

A long runway

At least Beam has something of a cash runway. It reported that its tally of cash, equivalents and marketable securities totaled $1.2 billion at the end of March, a notable improvement from the less than $851 million at the end of 2024.

Management said this will be sufficient to fund the company's spending into 2028, which should give it time to fully develop at least some of its current programs. For that reason alone, I wouldn't give up on this admittedly risky and speculative stock.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beam Therapeutics. The Motley Fool has a disclosure policy.