Sarepta Therapeutics (SRPT) Down 4.7% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Sarepta Therapeutics (SRPT). Shares have lost about 4.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Sarepta Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Q1 Earnings & Sales Beat Estimates

Sarepta reported adjusted earnings of 73 cents per share in the first quarter of 2024. The Zacks Consensus Estimate was pegged at a loss of 11 cents per share. In the year-ago period, the company posted adjusted loss of 99 cents.

The adjusted bottom-line figures exclude depreciation and amortization costs and stock-based compensation expenses. Including these items, earnings per share were 37 cents against the year-ago period’s loss of $5.86.

Sarepta recorded total revenues of $413.5 million, up 63% year over year. The upside was driven by sales of its four approved marketed therapies for DMD. The top line beat the Zacks Consensus Estimate of $372.8 million.

Quarter in Detail

The company’s product revenues were up 55% year over year to $359.5 million, driven by an increased demand for its marketed products. While the metric beat our estimate of $344 million, it marginally missed the Zacks consensus estimate of $360 million.

The company generated $133.9 million from Elevidys sales compared with $131.2 million in fourth-quarter 2023. Elevidys sales beat the Zacks Consensus Estimate and our model estimate of $131 million and $125 million, respectively.

Sarepta generated around $225.5 million in product sales from its three other PMO therapies, down almost 3% year over year.

Sarepta recorded around $54 million in collaboration revenues. This includes $48 million of revenues recognized related to Roche, declining an option to acquire the ex-US rights to a certain external, early-stage DMD development program. It also recorded contract manufacturing collaboration revenues of $5.8 million associated with commercial Elevidys supply delivered to Roche. In the year-ago period, it registered $22.0 million as collaboration revenues, which were also received from Roche.

Adjusted research and development expenses totaled $178.1 million, down 19% year over year. This downside was primarily caused by capitalization of commercial batches of Elevidys manufactured after its approval in June 2023. This was partially offset by ramp-up of the company’s other late-stage clinical studies.

Adjusted selling, general & administrative expenses were $100.5 million, up 21% year over year. This was primarily caused by an increase in professional service expenses incurred by the company for Elevidys’ launch.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted 28.57% due to these changes.

VGM Scores

Currently, Sarepta Therapeutics has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Sarepta Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Sarepta Therapeutics is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Incyte (INCY), a stock from the same industry, has gained 7.9%. The company reported its results for the quarter ended March 2024 more than a month ago.

Incyte reported revenues of $880.89 million in the last reported quarter, representing a year-over-year change of +8.9%. EPS of $0.64 for the same period compares with $0.37 a year ago.

For the current quarter, Incyte is expected to post earnings of $1.14 per share, indicating a change of +15.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Incyte. Also, the stock has a VGM Score of C.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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