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

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

Will the recent negative trend continue until the 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 the company’s most recent earnings report in order to better understand the important catalysts.

First-quarter earnings and sales beat estimates

Sarepta reported adjusted earnings per share of 73 cents per share for the first quarter of 2024. The Zacks Consensus Estimate calls for a loss of 11 cents per share. Last year, the company reported an adjusted loss of 99 cents.

Adjusted financial results exclude depreciation and stock-based compensation expense. Including these items, earnings per share were 37 cents, compared with a loss for the year-ago period of $5.86.

Sarepta reported total revenues of $413.5 million, up 63% year-over-year. The positive result was supported by the sale of four approved DMD therapies. The top line surpassed the Zacks Consensus Estimate of $372.8 million.

Quarter in detail

The company’s product revenue increased 55% year-over-year to $359.5 million, driven by increased demand for its products. While the figure topped our estimate of $344 million, it narrowly missed the Zacks Consensus Estimate of $360 million.

The company generated $133.9 million in sales for Elevidys, up from $131.2 million in the fourth quarter of 2023. Elevidys sales surpassed the Zacks Consensus Estimate and our model estimates of $131 million and $125 million, respectively.

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

Sarepta reported collaboration revenue of approximately $54 million. This includes revenues of $48 million related to Roche, related to the decline of an option to acquire ex-U.S. rights to certain external early-stage DMD development program. It also recorded contract manufacturing revenues of $5.8 million related to commercial shipments of Elevidys delivered to Roche. Last year, the company recorded collaboration revenues of $22.0 million, which it also received from Roche.

Adjusted research and development expenses were $178.1 million, down 19% year-over-year. This disadvantage was primarily due to the capitalization of commercial lots of Elevidys manufactured after its approval in June 2023. This was partially offset by the acceleration of other late-stage clinical trials conducted by the company.

Adjusted selling, general and administrative expenses were $100.5 million, an increase of 21% year-over-year. This was primarily due to the increase in professional service costs incurred by the company in connection with the launch of Elevidys.

How have estimates changed since then?

Over the last month, investors have seen a downward trend in estimate revisions.

As a result of these changes, the consensus estimate moved by 28.57%.

VGM results

Currently, Sarepta Therapeutics has a Weak Growth Score of D, however its Momentum Score is performing much better at A. However, the stock is rated D on the Value side, putting it in the bottom 40% for this investing strategy.

Overall, the stock has a Total VGM Score of D. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company are generally on a downward trend, and the magnitude of these revisions indicates a downward shift. Notably, Sarepta Therapeutics carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

Sarepta Therapeutics is part of the Zacks Medical – Biomedical & Genetics industry. Over the past month, shares of the same industry Incyte (INCY) have gained 7.9%. More than a month ago, the company published its results for the quarter ended March 2024.

In the most recent quarter, Incyte reported revenue of $880.89 million, representing a year-over-year change of +8.9%. EPS of $0.64 for the same period compared to $0.37 a year ago.

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

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

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