Sarepta Therapeutics (SRPT): Evaluating Valuation After FDA Progress and Pipeline Milestones

Sarepta Therapeutics (SRPT) is seeing renewed investor attention after the FDA cleared dosing for Cohort 8 in the ENDEAVOR study. The decision represents another regulatory milestone for Elevidys, Sarepta’s gene therapy for non-ambulant Duchenne muscular dystrophy.

See our latest analysis for Sarepta Therapeutics.

Despite some major news catalysts and regulatory progress for Sarepta, the stock’s share price return for the year-to-date is down a striking 82.8%, and its total shareholder return over the past year stands at -84%. While there has been a burst of momentum in the past week with a 20.6% increase in the share price return, long-term performance remains challenged. Sentiment could shift if these clinical milestones translate into meaningful revenue or reduced risk perception.

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Now, with Sarepta’s striking share price drop and recent regulatory wins, the main question is whether there is hidden value that markets have overlooked, or if all potential upside is already reflected in today’s price.

Most Popular Narrative: 7.2% Overvalued

With Sarepta closing at $21.34 and the most popular narrative estimating a fair value of $19.91, there is a divergence between sentiment and the consensus outlook. The current market price remains above where the narrative forecasts value, fueled by ongoing debate about future commercial momentum and clinical milestones.

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.

Read the complete narrative.

Want to uncover the bold assumptions behind this valuation call? See how future profit margins, shrinking revenues, and higher discount rates all feed into this calculation. Find out which metrics carry the most weight in shaping expectations for Sarepta’s next chapter, but only if you read the full narrative.

Result: Fair Value of $19.91 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing concerns about Elevidys safety and the pace of patient uptake could quickly alter the outlook for Sarepta’s recovery and valuation.

Find out about the key risks to this Sarepta Therapeutics narrative.

Another View: DCF Model Points in a Different Direction

Interestingly, while the current market price and popular narrative suggest Sarepta Therapeutics may be overvalued based on typical earnings multiples, our SWS DCF model reaches the opposite conclusion. According to this model, Sarepta is trading nearly 64% below its estimated fair value. What could explain this stark gap between analytical approaches?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Sarepta Therapeutics Narrative

If you see things differently or want to dig into the figures yourself, it only takes a few minutes to build your own perspective. Do it your way

A great starting point for your Sarepta Therapeutics research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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