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Why Is Sarepta Therapeutics (SRPT) Up 17.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Sarepta Therapeutics (SRPT - Free Report) . Shares have added about 17.2% 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.
Sarepta Q3 Loss Widens Y/Y, Revenues Beat Estimates
Sarepta incurred an adjusted loss of $1.14 per share in the third quarter of 2019, wider than the year-ago loss of 56 cents per share. The wider year-over-year loss can be primarily attributed to a significant rise in operating expenses.
Notably, the adjusted figure excludes one-time items, depreciation & amortization expenses, interest expenses, and income tax benefit. Including all these items, the company incurred a loss of $1.70 per share compared with a loss of $1.15 in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of $1.34.
Meanwhile, Sarepta’s Exondys 51 continued with its strong performance. The company derives revenues solely from the sale of Exondys 51. Sarepta recorded total revenues of $99 million, up 4.5% sequentially, which beat the Zacks Consensus Estimate of $97.5 million. In the prior-year quarter, Sarepta had earned revenues of $78.5 million.
Operating Expenses
Adjusted research and development (R&D) expenses totaled $110.5 million in the third quarter, up 72.1% year over year. The increase was primarily due to the ramp-up of manufacturing activities for micro-dystrophin program, partially offset by lower cost due to winding down of activities on the Utrophin platform by Sarepta’s partner, Summit.
Adjusted selling, general & administrative (SG&A) expenses were $59.6 million, up 40.2% year over year. Higher costs related to the global commercial expansion of its products and increased personnel expenses increased SG&A expenses.
Sarepta’s cost of sales was also higher, reflecting higher product costs due to rising demand for Exondys 51. Royalty payments to BioMarin per the terms of the 2017 settlement and license agreements related to the latter’s exon-skipping technology used in DMD therapies also drove cost of sales.
2019 Guidance
Sarepta raised its guidance for total revenues, solely from Exondys 51 sales, on the back of continued strong performance of the drug. The company currently expects sales to be in the range of $370 million to $380 million compared with the previous guidance of $365 million to $375 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -62.9% 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. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile 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. It's no surprise Sarepta Therapeutics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Sarepta Therapeutics (SRPT) Up 17.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Sarepta Therapeutics (SRPT - Free Report) . Shares have added about 17.2% 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.
Sarepta Q3 Loss Widens Y/Y, Revenues Beat Estimates
Sarepta incurred an adjusted loss of $1.14 per share in the third quarter of 2019, wider than the year-ago loss of 56 cents per share. The wider year-over-year loss can be primarily attributed to a significant rise in operating expenses.
Notably, the adjusted figure excludes one-time items, depreciation & amortization expenses, interest expenses, and income tax benefit. Including all these items, the company incurred a loss of $1.70 per share compared with a loss of $1.15 in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of $1.34.
Meanwhile, Sarepta’s Exondys 51 continued with its strong performance. The company derives revenues solely from the sale of Exondys 51. Sarepta recorded total revenues of $99 million, up 4.5% sequentially, which beat the Zacks Consensus Estimate of $97.5 million. In the prior-year quarter, Sarepta had earned revenues of $78.5 million.
Operating Expenses
Adjusted research and development (R&D) expenses totaled $110.5 million in the third quarter, up 72.1% year over year. The increase was primarily due to the ramp-up of manufacturing activities for micro-dystrophin program, partially offset by lower cost due to winding down of activities on the Utrophin platform by Sarepta’s partner, Summit.
Adjusted selling, general & administrative (SG&A) expenses were $59.6 million, up 40.2% year over year. Higher costs related to the global commercial expansion of its products and increased personnel expenses increased SG&A expenses.
Sarepta’s cost of sales was also higher, reflecting higher product costs due to rising demand for Exondys 51. Royalty payments to BioMarin per the terms of the 2017 settlement and license agreements related to the latter’s exon-skipping technology used in DMD therapies also drove cost of sales.
2019 Guidance
Sarepta raised its guidance for total revenues, solely from Exondys 51 sales, on the back of continued strong performance of the drug. The company currently expects sales to be in the range of $370 million to $380 million compared with the previous guidance of $365 million to $375 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -62.9% 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. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile 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. It's no surprise Sarepta Therapeutics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.