Sarepta Therapeutics, Inc. (NASDAQ:SRPT) Just Released Its Third-Quarter Earnings: Here's What Analysts Think
Last week, you might have seen that Sarepta Therapeutics, Inc. (NASDAQ:SRPT) released its third-quarter result to the market. The early response was not positive, with shares down 7.5% to US$126 in the past week. The results don’t look great, especially considering that statutory losses grew 44% toUS$2.50 per share. Revenues of US$144m did beat expectations by 7.7%, but it looks like a bit of a cold comfort. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Sarepta Therapeutics
Taking into account the latest results, the current consensus from Sarepta Therapeutics’ 19 analysts is for revenues of US$748.5m in 2021, which would reflect a substantial 51% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 32% to US$5.30. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$773.4m and losses of US$4.75 per share in 2021. While next year’s revenue estimates dropped there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
There was no major change to the consensus price target of US$191, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Sarepta Therapeutics, with the most bullish analyst valuing it at US$217 and the most bearish at US$161 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 51%, in line with its 56% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 21% next year. So it’s pretty clear that Sarepta Therapeutics is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Sarepta Therapeutics. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$191, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Sarepta Therapeutics going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we’ve discovered 2 warning signs for Sarepta Therapeutics that you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected].
