uploads///Sarepta ana reco

What Sarepta Therapeutics’ Valuation Trend Indicates

By

Sep. 13 2018, Updated 6:05 p.m. ET

Bottom line

Sarepta Therapeutics (SRPT) incurred a net loss of $109.27 million in the second quarter of 2018 compared to a net loss of $63.05 million in Q2 2017. That translates to a net loss per share of $1.67 in the second quarter of 2018. Its net loss per share was $1.15 in the second quarter of 2017.

Despite the surge in revenues, Sarepta’s net loss widened due to higher operating expenses, which increased from $98.35 million in the second quarter of 2017 to $176.96 million in the second quarter of 2018.

Article continues below advertisement

Analyst recommendations

In September, there are 21 analysts covering Sarepta Therapeutics (SRPT) stock. Twenty of them have given the stock a “buy” or higher rating, and one has given it a “hold.” The mean rating for Sarepta stock is 1.71 with a target price of $188.58, implying an upside potential of 26.2% over its trading price of $149.44 on September 12.

Peer ratings

In comparison, peers Alnylam Pharmaceuticals (ALNY), Ionis Pharmaceuticals (IONS), and BioCryst Pharmaceuticals (BCRX) have mean ratings of 2.06, 2.77, and 2.33, respectively, and target prices of $144.87, $56, and $10.25, respectively.

Valuation metrics

Amid the broader market turmoil, Sarepta stock corrected from $124.05 on January 2 to $106.04 on April 25, which was also its lowest point in 2018. Subsequently, it climbed to $137.18 on July 25 and then sharply corrected to its current $120 level.

The enterprise value of Sarepta is $8.97 billion, and its enterprise-value-to-revenue ratio is 37.17x. Its price-to-sales ratio is 41.19x, and its price-to-book ratio is 14.20x.

Its current ratio, a metric of how effectively a company can meet its short-term obligations, stands at 10.90x. In comparison, the ratios for peers Alnylam Pharmaceuticals (ALNY), Ionis Pharmaceuticals (IONS), and BioCryst Pharmaceuticals (BCRX) are 13.20x, 8.40x, and 1.20x, respectively.

Advertisement

More From Market Realist