We Might See A Profit From Sarepta Therapeutics, Inc. (NASDAQ:SRPT) Soon

We feel now is a pretty good time to analyse Sarepta Therapeutics, Inc.'s (NASDAQ:SRPT) business as it appears the company may be on the cusp of a considerable accomplishment. Sarepta Therapeutics, Inc., 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. On 31 December 2023, the US$12b market-cap company posted a loss of US$536m for its most recent financial year. As path to profitability is the topic on Sarepta Therapeutics' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Sarepta Therapeutics

Consensus from 19 of the American Biotechs analysts is that Sarepta Therapeutics is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$222m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 42% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Sarepta Therapeutics' upcoming projects, though, keep in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Sarepta Therapeutics is its debt-to-equity ratio of 144%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Sarepta Therapeutics which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Sarepta Therapeutics, take a look at Sarepta Therapeutics' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Sarepta Therapeutics worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Sarepta Therapeutics is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sarepta Therapeutics’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.