Perilous Reversal Stock: Sarepta Therapeutics (SRPT)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Sarepta Therapeutics ( SRPT) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sarepta Therapeutics as such a stock due to the following factors:

  • SRPT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.4 million.
  • SRPT has traded 55,152 shares today.
  • SRPT is down 3.1% today.
  • SRPT was up 6.8% yesterday.

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More details on SRPT:

Sarepta Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery and development of RNA-based therapeutics for the treatment of rare and infectious diseases. Currently there are 7 analysts that rate Sarepta Therapeutics a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Sarepta Therapeutics has been 1.9 million shares per day over the past 30 days. Sarepta has a market cap of $1.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.25 and a short float of 42.4% with 10.54 days to cover. Shares are up 42.4% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sarepta Therapeutics as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • SRPT has underperformed the S&P 500 Index, declining 7.35% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, SAREPTA THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • SRPT, with its very weak revenue results, has greatly underperformed against the industry average of 15.1%. Since the same quarter one year prior, revenues plummeted by 64.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • SAREPTA THERAPEUTICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SAREPTA THERAPEUTICS INC continued to lose money by earning -$3.39 versus -$4.95 in the prior year. This year, the market expects an improvement in earnings (-$3.18 versus -$3.39).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 85.8% when compared to the same quarter one year prior, rising from -$62.07 million to -$8.82 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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