Sarepta Therapeutics, Inc. (NASDAQ:SRPT) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Shareholders might have noticed that Sarepta Therapeutics, Inc. (NASDAQ:SRPT) filed its annual result this time last week. The early response was not positive, with shares down 5.8% to US$129 in the past week. Revenue hit US$1.2b in line with forecasts, although the company reported a statutory loss per share of US$5.80 that was somewhat smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sarepta Therapeutics after the latest results.
Check out our latest analysis for Sarepta Therapeutics
After the latest results, the 19 analysts covering Sarepta Therapeutics are now predicting revenues of US$1.87b in 2024. If met, this would reflect a major 50% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Sarepta Therapeutics forecast to report a statutory profit of US$2.44 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.00b and earnings per share (EPS) of US$3.63 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
The analysts made no major changes to their price target of US$164, suggesting the downgrades are not expected to have a long-term impact on Sarepta Therapeutics' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Sarepta Therapeutics at US$224 per share, while the most bearish prices it at US$128. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Sarepta Therapeutics' rate of growth is expected to accelerate meaningfully, with the forecast 50% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 27% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sarepta Therapeutics is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for 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$164, 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 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Sarepta Therapeutics that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
