A month has gone by since the last earnings report for Sarepta Therapeutics (SRPT). Shares have added about 17.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sarepta Therapeutics due for a pullback? 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.
Q3 Earnings and Sales Miss Estimates
Sarepta reported a loss of $2.94 per share in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $1.21 per share. The loss was also wider than the year-ago quarter’s loss of 60 cents per share.
The company reported an adjusted loss of 80 cents per share against adjusted earnings of 3 cents in the year-ago quarter. The adjusted figure excludes one-time items, depreciation and amortization expenses, interest expenses, income tax benefit, stock-based compensation expenses and other items.
Sarepta recorded total revenues of $230.3 million, up 21.6% year over year. Revenues missed the Zacks Consensus Estimate of $235.8 million. The year-over-year increase in revenues was driven by the sales of Sarepta’s three currently approved RNA-based PMO therapies for DMD.
Quarter in Detail
The company derived product revenues of $207.8 million, up 24.5% year over year. The upside was driven by an increase in demand for its DMD products.
The company recorded $22.3 million in collaboration revenues, primarily from its licensing agreement with Roche. Collaboration revenues were flat compared with the year-ago quarter’s levels.
Adjusted research and development (R&D) expenses totaled $193.7 million in the third quarter, up 61.9% year over year. This surge is attributable to the increase in manufacturing expenses for ramping up production for SRP-9001.
Adjusted selling, general & administrative (SG&A) expenses were $66.8 million, up 53.2% year over year.
2022 Guidance
Sarepta reiterated its revenue guidance for 2022. Management expects total revenues in 2022 to be in the range of $905-$920. The company expects net product revenues for the full year to be in the range of $825-$840 million.
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 -8.16% due to these changes.
VGM Scores
Currently, Sarepta Therapeutics has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 F. 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 belongs to the Zacks Medical – Biomedical and Genetics industry. Another stock from the same industry, Biogen Inc. (BIIB), has gained 7.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Biogen Inc. reported revenues of $2.51 billion in the last reported quarter, representing a year-over-year change of -9.7%. EPS of $4.77 for the same period compares with $4.77 a year ago.
For the current quarter, Biogen Inc. is expected to post earnings of $3.41 per share, indicating a change of +0.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.4% over the last 30 days.
Biogen Inc. has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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