Sarepta Therapeutics (SRPT) reports first-quarter loss, highest revenue estimates

Sarepta Therapeutics (SRPT) came out with a quarterly loss of $0.97 per share versus the Zacks Consensus Estimate of a loss of $1.46. That compares to a loss of $1.20 per share a year ago. The figure is adjusted for one-time items.

This quarterly report presented an earnings surprise of 33.56%. A quarter ago, it was expected that this biopharmaceutical company would post a loss of $1.28 per share when it actually produced a loss of $1.24, delivering a surprise of 3.13%.

The company has topped consensus EPS estimates twice over the last four quarters.

Sarepta Therapeutics, which belongs to the Zacks Medical – Biomedical and Genetics industry, posted revenues of $253.5 million for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 13.60%. This compares to prior year revenues of $210.83 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Since the beginning of the year, shares of Sarepta Therapeutics have lost about 3.5%, while the S&P 500 Index has gained 8.6%.

What’s next for Sarepta Therapeutics?

Although Sarepta Therapeutics has underperformed the market so far this year, the question that arises for investors is: what’s next for the company’s stock?

There are no simple answers to this key question, but one reliable indicator that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revision trend for Sarepta Therapeutics is unfavorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. As such, the stock is expected to underperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is -$2.12 on $249.94M in revenues for the coming quarter and -$4.91 on $1.22B in revenues for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Medical Biomedical and Genetics industry is currently in the top 34% of over 250 Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company in the same industry, Arbutus Biopharma (ABUS), has not yet released results for the quarter ending March 2023. The results are expected to be released on May 4.

The biopharmaceutical company is expected to report quarterly loss of $0.14 per share in its upcoming report, representing a year-over-year change of -27.3%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

Arbutus Biopharma revenue is expected to be $4.52 million, down 64.1% from the same quarter last year.

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