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Sarepta Therapeutics (NasdaqGS:SRPT) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Sarepta Therapeutics, Inc. (NasdaqGS:SRPT) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of -$1.40/share on revenue of $133.7 million. The consensus earnings per share (EPS) of -$1.40/share is based on a poll of 6 analysts and represents a decline in eps of -22.9% over the same quarter last year, when the company reported earnings of -$1.14/share.

The revenue forecast of $133.7 million based on a poll of 16 analysts implies a year-over-year (YoY) growth in revenue of 35.0%. Last year the company reported $99.041 million in revenue for the quarter.

Expected to report EPS of -$1.40/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $133.69 $99.04 35.0%
EPS -$1.40 -$1.14 -22.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 1 out of the last 8 tracked quarters, and missed expectations 7 quarters.

What are your expectations from Sarepta Therapeutics, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$1.31 -$1.51 -15.1% Missed
Q1, 2020 $1.93 -$1.04 153.9% Beat
Q4, 2019 -$1.27 -$1.57 -23.6% Missed
Q3, 2019 -$0.92 -$1.14 -24.0% Missed
Q2, 2019 -$0.77 -$0.83 -8.2% Missed
Q1, 2019 -$0.81 -$0.75 −6.9% Missed
Q4, 2018 -$0.73 -$0.85 -15.8% Missed
Q3, 2018 -$0.49 -$0.56 -14.9% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $156.73 $154.42 −1.5% Decline
May 6, 2020 $119.44 $123.61 3.5% Increase
February 26, 2020 $113.79 $107.67 −5.4% Decline
November 7, 2019 $92.31 $96.28 4.3% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.51, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.51 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Sarepta Therapeutics, Inc. is currently trading at $135.91/share, down −3.9% for the day. The company is trading at approximately 77.7% of its 52-week high of $175/share. The company’s stock price is down −12.0% since the last earnings report and down −1.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 40.01 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SRPT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −20.12 and a forward P/E multiple of −25.54.

Sarepta Therapeutics, Inc.’s current share price also implies a price-to-book (P/B) multiple of 10.23. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $135.91
P/E Ratio −20.1x
P/E Ratio (Fwd) −25.5x
PEG Ratio −1.5
Total Debt / Total Capital 6.6%
Levered Free Cash Flow $234 million
EV / EBITDA −16.5x

Finbox

Sarepta Therapeutics, Inc. is a large-cap stock with a market capitalization of $10.67 billion and a total enterprise value of $9.39 billion. The company operates in the Healthcare sector and the Biotechnology industry.

Sarepta Therapeutics, Inc., a commercial-stage biopharmaceutical company, focuses on the discovery and development of RNA-targeted therapeutics, gene therapy, and other genetic therapeutic modalities approaches for the treatment of rare diseases. The company offers EXONDYS 51 injection to treat duchenne muscular dystrophy (DMD) in patients who have a confirmed mutation of the DMD gene that is amenable to exon 51 skipping; and VYONDYS 53 for the treatment of DMD in patients who have a confirmed mutation of the DMD gene that is amenable to exon 53 skipping. It also developing Casimersen, a product candidate that uses phosphorodiamidate morpholino oligomer (PMO) chemistry and exon-skipping technology to skip exon 45 of the DMD gene; SRP-5051, a peptide conjugated PMO that binds exon 51 of dystrophin pre-mRNA; SRP-9001, a DMD micro-dystrophin gene therapy program; SRP-9003, a limb-girdle muscular dystrophies gene therapy program; and LYS-SAF 302 to treat mucopolysaccharidosis type IIIA. The company has collaboration agreements with F. Hoffman-La Roche Ltd; Nationwide Children’s Hospital; Lysogene; Duke University; Genethon; StrideBio; the United States Army Medical Research Institute of Infectious Diseases; the Department of Defense’s lead laboratory; the Dyno Therapeutics, Inc; and Personalis, Inc. It also has a research and option agreement with Codiak BioSciences, Inc. to design and develop engineered exosome therapeutics to deliver gene therapy, gene editing, and RNA technologies for neuromuscular diseases. Sarepta Therapeutics, Inc. was founded in 1980 and is headquartered in Cambridge, Massachusetts.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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