Inside Sarepta's 26.4% Rally: What the Latest Earnings Tell Investors

The Recent Price Action and What Triggered It

Over the past month, SRPT stock has climbed 26.4%, significantly outpacing broad market indices. This surge didn’t emerge from thin air—it followed the company’s third-quarter earnings release. However, beneath the surface gains lies a more complex picture that deserves closer examination.

Breaking Down Q3 Performance: Where Sarepta Stood

Sarepta Therapeutics reported mixed results for the third quarter of 2025. On the earnings side, the company posted an adjusted loss of $0.13 per share, falling short of the Zacks consensus estimate of $0.01 per share. Compared to the prior-year period’s $0.43 adjusted EPS, this represents a notable deterioration. The GAAP loss reached $1.80 per share versus a $0.34 EPS gain a year earlier—a significant reversal.

Revenue, however, told a different story. Total sales reached $399.4 million, down approximately 15% year-over-year but exceeding the $352.6 million consensus forecast. This revenue beat provided some support to investor sentiment, even as profitability metrics weakened.

Dissecting the Revenue Composition

PMO Therapies Drive Product Sales

Product revenues contracted 14% annually to $370.0 million. Within this category, the company’s three PMO therapies generated $238.5 million in sales—a 4% decline from the year-ago period yet surpassing both the $225 million consensus estimate and internal projections of $220 million.

Elevidys: The Complicated Story

Elevidys represented $131.5 million in sales, reflecting a steep 27% year-over-year decrease. The primary culprit was SRPT’s June 2025 decision to halt shipments to non-ambulatory patients following safety concerns. Despite this headwind, the product still managed to beat analyst expectations of $107 million and internal estimates of $120 million.

Collaboration revenues, primarily from Roche supply arrangements, totaled $29.3 million, down 22% annually due to reduced manufacturing volumes shipped during the quarter.

The Expense Picture and Strategic Shifts

Adjusted research and development spending climbed to $206.5 million, up 3% year-over-year, as SRPT increased upfront investments and milestone payments toward advancing its pipeline. Conversely, adjusted selling, general and administrative costs fell 23% to $77.1 million—a direct result of the restructuring initiative launched in July.

What Management Expects Ahead

For the full year 2025, Sarepta maintains its guidance for at least $500 million in annual revenue from Elevidys infusions targeting the ambulant patient population. The company projects fourth-quarter infusion volumes to remain flat to slightly lower sequentially, citing ongoing market disruptions and seasonal patterns.

Total adjusted SG&A and R&D expenses are anticipated to reach $420-$430 million for Q4, with full-year guidance standing around $1.86 billion (including a $200 million milestone payment to Arrowhead Pharmaceuticals for a second DM1 program). Three PMO therapies are expected to generate approximately $900 million in 2025 sales.

Notably, SRPT has not yet quantified how recent reported patient deaths might impact Elevidys sales going forward.

The Analyst Reappraisal and Valuation Metrics

Following the earnings announcement, fresh estimate revisions have actually trended downward over the past month, with consensus shifting -10.82%. This downward momentum stands in contrast to the stock’s recent price appreciation.

The Zacks VGM scoring system reveals telling insights:

• Growth Score: F (weak)
• Momentum Score: F (weak)
• Value Score: C (middle 20% for value-focused investors)
• Aggregate VGM Score: F

SRPT carries a Zacks Rank #3 (Hold) designation, suggesting neutral near-term prospects over the coming months.

Benchmarking Against Sector Peers

Within the Medical - Biomedical and Genetics industry, performance has been mixed. Bristol Myers Squibb (BMY), a comparable player in the space, gained 5.8% over the same month-long window.

BMY’s most recent quarter (ended September 2025) showed revenues of $12.22 billion, representing 2.8% year-over-year growth. The company posted earnings of $1.63 per share versus $1.80 a year prior. Current-quarter EPS guidance stands at $1.65, implying a -1.2% year-over-year decline. Over the last 30 days, BMY’s consensus estimate has edged up 0.6%.

Bristol Myers holds a Zacks Rank #3 (Hold) with a significantly stronger VGM Score of A, positioning it more favorably on valuation metrics.

The Bottom Line for Investors

Sarepta’s 26.4% monthly advance has outpaced the broader market, yet fundamental headwinds persist. Deteriorating earnings quality, downward estimate revisions, and weak forward-looking metrics suggest caution. While the revenue beat provided temporary support, the profitability miss and elevated risk around Elevidys demand warrant careful consideration before adding exposure.