Last Update 25 Dec 25

Fair value Increased 0.85%

SRPT: Future Risk Reward Will Hinge On Evolving Safety And Coverage Decisions

The analyst price target for Sarepta Therapeutics has been raised slightly, by about $0.20 per share. Analysts attribute this to stronger than expected Elevidys adoption, supportive payer coverage, and a more favorable risk and reward profile, despite unchanged long-term growth and margin assumptions.

Analyst Commentary

Recent Street research on Sarepta reflects a more constructive stance on the company, driven primarily by stronger than expected uptake of Elevidys and improving visibility on reimbursement. However, valuation and competitive risks continue to temper enthusiasm among some market participants.

Bullish Takeaways

Bullish analysts highlight Elevidys adoption trends as tracking ahead of earlier expectations, which supports higher revenue trajectories and underpins recent upward revisions to price targets.
Commentary from management around payer coverage is viewed as encouraging, with favorable reimbursement dynamics seen as a key catalyst for sustained growth and reduced execution risk.
Stronger than anticipated Q3 performance, delivered despite commercial pauses and safety scrutiny, is interpreted as evidence of durable demand that could justify a higher multiple on near to mid term earnings.
At current share levels, bullish analysts see the risk and reward profile skewed positively, arguing that the market still underappreciates the long term commercial opportunity for Sarepta’s gene therapy portfolio.

Bearish Takeaways

Bearish analysts, while acknowledging improved fundamentals, maintain a more conservative stance on valuation, cautioning that recent strength in Elevidys demand may already be largely reflected in the share price.
Some remain focused on lingering safety and regulatory uncertainties in gene therapy, which could introduce volatility to execution timelines and constrain the pace of label or geographic expansion.
There is concern that unchanged long term growth and margin assumptions limit upside to out year estimates, leading more cautious voices to view recent target increases as incremental rather than thesis changing.
Within the broader small to mid cap biotech space, Sarepta is still seen by some as higher risk relative to diversified peers, keeping more defensive investors on the sidelines despite near term positive momentum.

What's in the News

New York State's Drug Utilization Review Board has recommended that Medicaid pause coverage of Elevidys for Duchenne muscular dystrophy until updated FDA safety and clinical trial data are added to the label, and a new liver risk mitigation regimen is evaluated (STAT).
The FDA has cleared dosing of Cohort 8 in Sarepta's ENDEAVOR trial, allowing evaluation of an enhanced immunosuppression regimen with Elevidys for non ambulant DMD patients, as the company works to address risks of acute serious liver injury and liver failure.
Sarepta reported multiple label updates for Elevidys, including a boxed warning for acute serious liver injury and acute liver failure, removal of the non ambulatory indication, and expanded monitoring and immunosuppression guidance, while emphasizing that more than 1,100 patients have been treated globally.
In the Phase 1/2 MAD study of SRP 1003 for myotonic dystrophy type 1, Sarepta has completed early dose cohorts, fully enrolled cohort 3, initiated higher dose cohorts, and triggered a 200 million dollar milestone payment to Arrowhead, underscoring ongoing investment in its next generation siRNA platform.
Top line data from the long running ESSENCE Phase 3 trial of AMONDYS 45 and VYONDYS 53 showed numerical but not statistically significant benefit on the primary endpoint overall, though non COVID impacted patients showed a larger treatment effect, supporting Sarepta's plan to seek conversion from accelerated to traditional FDA approval based on totality of evidence.

Valuation Changes

Fair Value has risen slightly from 20.43 to 20.61, reflecting a modest increase of about 0.9 percent in the intrinsic value estimate.
Discount Rate has edged down marginally from 7.99 percent to 7.96 percent, implying a slightly lower perceived risk profile in the updated model.
Revenue Growth assumptions remain effectively unchanged at approximately minus 15.74 percent, indicating no material revision to long term top line expectations.
Net Profit Margin is essentially flat at about 11.04 percent, signaling stable long term profitability assumptions.
Future P/E has increased slightly from 20.67x to 20.83x, suggesting a modestly higher valuation multiple applied to forward earnings.

Addressing operational delays and administrative complexities in gene therapy could enhance revenue by quickly converting demand into treated patients.
Expanding into LGMD and siRNA platforms diversifies revenue, potentially boosting earnings and financial stability.
Safety concerns and administrative delays could impact ELEVIDYS demand and revenue growth, while high research costs pressure profitability amidst cautious market uptake.

Catalysts

About Sarepta Therapeutics

A commercial-stage biopharmaceutical company, focuses on the discovery and development of RNA-targeted therapeutics, gene therapies, and other genetic therapeutic modalities for the treatment of rare diseases.What are the underlying business or industry changes driving this perspective?

Sarepta's ELEVIDYS product has shown significant revenue growth, but due to operational delays and safety concerns, there is room for further patient and physician education which could drive revenue as confidence in the therapy is restored and more families choose to access the treatment.
Administrative complexities in gene therapy, including longer start form to infusion times, can be improved, potentially streamlining processes and enhancing future revenue by more quickly translating demand into treated patients.
Efforts to balance demand across affiliated treatment centers with additional capacity could improve the ability to treat more patients, advancing revenue growth as these centers become more effective and productive in patient throughput.
The scheduled dissemination of additional safety and efficacy data for ELEVIDYS, and anticipated label updates for new patient populations, provides clear pathways to further demonstrate the therapy’s positive risk-benefit, likely enhancing long-term revenue drivers.
Development and commercialization of other programs like the LGMD and siRNA platforms represent additional revenue streams. Expansion within these areas could drive significant future earnings and diversify Sarepta's product portfolio, positively impacting overall financial health.

Sarepta Therapeutics Earnings and Revenue Growth

Sarepta Therapeutics Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Sarepta Therapeutics's revenue will decrease by 17.0% annually over the next 3 years.
Analysts assume that profit margins will increase from -2.3% today to 12.1% in 3 years time.
Analysts expect earnings to reach $171.6 million (and earnings per share of $1.07) by about September 2028, up from $-58.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $542.6 million in earnings, and the most bearish expecting $-111.3 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.5x on those 2028 earnings, up from -29.9x today. This future PE is greater than the current PE for the US Biotechs industry at 15.3x.
Analysts expect the number of shares outstanding to grow by 2.3% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.96%, as per the Simply Wall St company report.

Sarepta Therapeutics Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The tragic event of a child's acute liver failure and death following ELEVIDYS infusion could lead to increased scrutiny, cautious patient uptake, and potential regulatory challenges, impacting revenue growth.
Complex and prolonged administrative processes for gene therapy infusions, including issues like single-case agreements, can delay treatments and thus defer revenue recognition.
The dependency on a few top sites with limited capacity, coupled with a significant backlog, creates bottlenecks in patient treatment, thereby affecting the timing of revenue realization.
Safety concerns stemming from the recent patient death may affect physician and patient confidence, influencing demand for ELEVIDYS and potentially impacting earnings.
High upfront costs for research and collaborations, evidenced by the significant expenses with Arrowhead, might pressure net margins and overall profitability in the face of slower than expected revenue recognition.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $23.96 for Sarepta Therapeutics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $80.0, and the most bearish reporting a price target of just $5.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.4 billion, earnings will come to $171.6 million, and it would be trading on a PE ratio of 18.5x, assuming you use a discount rate of 8.0%.
Given the current share price of $17.64, the analyst price target of $23.96 is 26.4% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

SRPT: Upcoming Clinical Data Will Drive Renewed Momentum In Gene Therapy Efforts