Sarepta Therapeutics’s (NASDAQ:SRPT) Q4: Beats On Revenue

February 26, 2025 at 16:36 PM EST

SRPT Cover Image

Biotech company Sarepta Therapeutics (NASDAQ: SRPT) announced better-than-expected revenue in Q4 CY2024, with sales up 65.9% year on year to $658.4 million. Its non-GAAP profit of $1.90 per share was 7.8% below analysts’ consensus estimates.

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Sarepta Therapeutics (SRPT) Q4 CY2024 Highlights:

Revenue: $658.4 million vs analyst estimates of $631.3 million (65.9% year-on-year growth, 4.3% beat)
Adjusted EPS: $1.90 vs analyst expectations of $2.06 (7.8% miss)
Adjusted EBITDA: $221.2 million vs analyst estimates of $222.2 million (33.6% margin, in line)
Operating Margin: 24.6%, up from 6.2% in the same quarter last year
Market Capitalization: $10.22 billion

“2024 performance represented the fruition of our multi-year strategy to become a self-sustaining profitable biotech dedicated to improving the lives of patients with rare genetic disease. After obtaining a broad label for our gene therapy ELEVIDYS covering the vast majority of Duchenne patients, we had the most successful gene therapy launch in history, even as we continued to serve the community with our PMOs, EXONDYS 51, VYONDYS 53 and AMONDYS 45. And as we advanced our internal gene therapy pipeline, we also continued our diversification and secured our future by in-licensing a broad platform of siRNA programs, with potential blockbuster opportunities that could reach the market in 2028 and 2029,” said Doug Ingram, president and Chief Executive Officer, Sarepta Therapeutics.

Company Overview

Founded in 1980, Sarepta Therapeutics (NASDAQ: SRPT) is a biopharmaceutical company focused on developing precision genetic medicines to treat rare neuromuscular diseases, including Duchenne muscular dystrophy (muscle cell breakdown over time).

Therapeutics

Over the next few years, therapeutic companies, which develop a wide variety of treatments for diseases and disorders, face strong tailwinds from advancements in precision medicine (including the use of AI to improve hit rates) and growing demand for treatments targeting rare diseases. However, headwinds such as rising scrutiny over drug pricing, regulatory unknowns, and competition from larger, more resourced pharmaceutical companies could weigh on growth.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Sarepta Therapeutics grew its sales at an incredible 37.9% compounded annual growth rate. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Sarepta Therapeutics’s annualized revenue growth of 42.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. Sarepta Therapeutics Year-On-Year Revenue Growth

We can dig further into the company’s revenue dynamics by analyzing its most important segment, . Over the last two years, Sarepta Therapeutics’s revenue averaged 44.9% year-on-year growth.

This quarter, Sarepta Therapeutics reported magnificent year-on-year revenue growth of 65.9%, and its $658.4 million of revenue beat Wall Street’s estimates by 4.3%.

Looking ahead, sell-side analysts expect revenue to grow 67.2% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will catalyze better top-line performance.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Although Sarepta Therapeutics was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 30.3% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, Sarepta Therapeutics’s operating margin rose over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 68.9 percentage points on a two-year basis. These data points are very encouraging and shows momentum is on its side.

Sarepta Therapeutics Trailing 12-Month Operating Margin (GAAP)

This quarter, Sarepta Therapeutics generated an operating profit margin of 24.6%, up 18.4 percentage points year on year. This increase was a welcome development and shows it was recently more efficient because its expenses grew slower than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sarepta Therapeutics’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

Sarepta Therapeutics Trailing 12-Month EPS (Non-GAAP)

In Q4, Sarepta Therapeutics reported EPS at $1.90, up from $0.82 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Sarepta Therapeutics’s full-year EPS of $3.69 to grow 200%.

Key Takeaways from Sarepta Therapeutics’s Q4 Results

We enjoyed seeing Sarepta Therapeutics beat analysts’ revenue expectations this quarter. On the other hand, its EPS missed significantly. Zooming out, we think this was a mixed quarter. The areas below expectations seem to be driving the move, and the stock traded down 3.9% to $103 immediately following the results.

Is Sarepta Therapeutics an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.

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