Value
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.6 |
| P/S | 9.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 6.1x
- ▸PEG: 0.01
- ▸Attractively valued
SRPT · Why this verdict
Why Sarepta Therapeutics (SRPT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sarepta Therapeutics has beaten earnings estimates in 3 of the last 4 quarters and generates free cash flow equal to 315% of net income, but is almost entirely dependent on its Duchenne muscular dystrophy product franchise and trades in a technical recovery pattern with 29% short interest and a weak overall score of 4.6 out of 10 reflecting concentrated product risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Sarepta generates free cash flow equal to 315% of net income and has a Piotroski financial strength score of 7 out of 9, demonstrating that despite weak reported net margins, the Duchenne muscular dystrophy product franchise is generating significant operating cash that greatly exceeds accounting profits. Quality breakdown | Free cash flow remains above 200% of net income for each of the next 4 reported quarters as Duchenne product revenues are sustained or grown, confirming that the cash generation quality is structural to the business model. | →Stable |
| CounterWith gross margin scored at only 0.3 out of 10 in the quality model, the business economics appear to show very low gross profitability on a reported basis; the high FCF-to-net-income ratio may reflect investment tax credits, milestone payments, or other non-recurring items that inflate cash relative to sustainable operating cash flow. | ||
Analyst consensus implies approximately 40% upside from the current $15.77 price to targets near $19.80, with an analyst price target score of 9.1 out of 10 — one of the highest readings in the screened universe — and sentiment score of 6.3 out of 10 reflecting broadly positive professional views on the Duchenne program. Sentiment breakdown | Analyst consensus price target remains above $18.00 and the stock closes at least 20% of the gap to targets within 12 months, reaching at least $18.50, as Duchenne treatment data continues to support the commercial thesis. | →Stable |
| CounterHigh analyst price targets for concentrated biotech stocks often reflect optimism about unpredictable commercial ramp dynamics; the 29% short interest indicates that a significant portion of sophisticated investors actively disagrees with analyst optimism. | ||
The bear case identifies 2 high-severity concentration risks: product concentration in Duchenne products and supplier concentration in Catalent (a contract manufacturer) — creating binary vulnerability where either the Duchenne franchise declines or a manufacturing disruption could materially harm the business simultaneously. Bear case | Duchenne product revenues grow at least 5% year-over-year in the next annual reporting period and no manufacturing supply disruptions are disclosed in any quarterly filing, demonstrating that both concentration risks are being actively managed. | →Stable |
| CounterConcentration in a single rare disease indication means the entire revenue base is subject to FDA regulatory decisions, competitive gene therapies, and Catalent's manufacturing reliability — three independent risk factors each capable of causing a 30% or greater revenue impairment. | ||
With 29% short interest and a momentum score of only 3.2 out of 10 (below the minimum gate threshold), the stock is in a technical recovery setup: the moving average convergence-divergence is improving from below zero, but the stock trades below its 200-day moving average and volume is showing distribution. Key risks | Short interest falls below 20% within 6 months as earnings data or clinical updates convert shorts to neutral or long positions, and the stock reclaims its 200-day moving average within the same period. | →Stable |
| CounterHigh short interest of 29% in a biotech stock with a poor momentum score and a -365% earnings miss in February 2026 (despite overall beat streak) indicates that the bears have genuine information-edge concerns about earnings quality or pipeline risks that are not yet visible in aggregate data. | ||
Sarepta generates free cash flow equal to 315% of net income and has a Piotroski financial strength score of 7 out of 9, demonstrating that despite weak reported net margins, the Duchenne muscular dystrophy product franchise is generating significant operating cash that greatly exceeds accounting profits.
→StableQuality breakdown
- Expectation
- Free cash flow remains above 200% of net income for each of the next 4 reported quarters as Duchenne product revenues are sustained or grown, confirming that the cash generation quality is structural to the business model.
CounterWith gross margin scored at only 0.3 out of 10 in the quality model, the business economics appear to show very low gross profitability on a reported basis; the high FCF-to-net-income ratio may reflect investment tax credits, milestone payments, or other non-recurring items that inflate cash relative to sustainable operating cash flow.
Analyst consensus implies approximately 40% upside from the current $15.77 price to targets near $19.80, with an analyst price target score of 9.1 out of 10 — one of the highest readings in the screened universe — and sentiment score of 6.3 out of 10 reflecting broadly positive professional views on the Duchenne program.
→StableSentiment breakdown
- Expectation
- Analyst consensus price target remains above $18.00 and the stock closes at least 20% of the gap to targets within 12 months, reaching at least $18.50, as Duchenne treatment data continues to support the commercial thesis.
CounterHigh analyst price targets for concentrated biotech stocks often reflect optimism about unpredictable commercial ramp dynamics; the 29% short interest indicates that a significant portion of sophisticated investors actively disagrees with analyst optimism.
The bear case identifies 2 high-severity concentration risks: product concentration in Duchenne products and supplier concentration in Catalent (a contract manufacturer) — creating binary vulnerability where either the Duchenne franchise declines or a manufacturing disruption could materially harm the business simultaneously.
→StableBear case
- Expectation
- Duchenne product revenues grow at least 5% year-over-year in the next annual reporting period and no manufacturing supply disruptions are disclosed in any quarterly filing, demonstrating that both concentration risks are being actively managed.
CounterConcentration in a single rare disease indication means the entire revenue base is subject to FDA regulatory decisions, competitive gene therapies, and Catalent's manufacturing reliability — three independent risk factors each capable of causing a 30% or greater revenue impairment.
With 29% short interest and a momentum score of only 3.2 out of 10 (below the minimum gate threshold), the stock is in a technical recovery setup: the moving average convergence-divergence is improving from below zero, but the stock trades below its 200-day moving average and volume is showing distribution.
→StableKey risks
- Expectation
- Short interest falls below 20% within 6 months as earnings data or clinical updates convert shorts to neutral or long positions, and the stock reclaims its 200-day moving average within the same period.
CounterHigh short interest of 29% in a biotech stock with a poor momentum score and a -365% earnings miss in February 2026 (despite overall beat streak) indicates that the bears have genuine information-edge concerns about earnings quality or pipeline risks that are not yet visible in aggregate data.
Per-dimension breakdown
Quality
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.6 |
| ROA | 0.0 |
| Gross margin | 0.3 |
| Op margin | 10.0 |
| Net margin | 1.5 |
| Current ratio | 8.4 |
| FCF quality | 10.0 |
| Moat | 3.9 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 315% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
2.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
- ▸Declining revenue: -2%
Momentum
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.2%/30d — confirmed downtrend
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.7 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 32%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 6.3 |
| growth rank | 2.9 |
Technical
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 4.2 |
| 52w position | 0.0 |
Risk (lower is worse)
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 1.7 |
| volatility | 0.0 |
| put call | 7.3 |
| implied vol | 1.3 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 6.8 |
- ▸High short interest: 29%
- ▸High IV: 72%
- ▸Above max pain $6
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.9<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.52
Upside
+18.5%
Downside
12.1%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 50
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $1.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.9<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.52 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.1, Sentiment at 6.2, and Insider at 5.0; the weakest are Growth at 2.0, Technical at 2.8, and Risk (lower is worse) at 3.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.52 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Sarepta generates free cash flow equal to 315% of net income and has a Piotroski financial strength score of 7 out of 9, demonstrating that despite weak reported net margins, the Duchenne muscular dystrophy product franchise is generating significant operating cash that greatly exceeds accounting profits.
Trip ifFree cash flow falls below 150% of net income for 2 consecutive quarters, indicating the cash generation advantage from the Duchenne franchise is deteriorating.
- P2Analyst consensus implies approximately 40% upside from the current $15.77 price to targets near $19.80, with an analyst price target score of 9.1 out of 10 — one of the highest readings in the screened universe — and sentiment score of 6.3 out of 10 reflecting broadly positive professional views on the Duchenne program.
Trip ifAnalyst consensus price target falls below $14.00, more than 11% below the current price, indicating broad downward revisions driven by Duchenne commercial disappointment.
- P3The bear case identifies 2 high-severity concentration risks: product concentration in Duchenne products and supplier concentration in Catalent (a contract manufacturer) — creating binary vulnerability where either the Duchenne franchise declines or a manufacturing disruption could materially harm the business simultaneously.
Trip ifDuchenne product revenue declines by more than 15% year-over-year in any reported quarter, or a material supply disruption is disclosed affecting more than 30% of manufacturing capacity.
- P4With 29% short interest and a momentum score of only 3.2 out of 10 (below the minimum gate threshold), the stock is in a technical recovery setup: the moving average convergence-divergence is improving from below zero, but the stock trades below its 200-day moving average and volume is showing distribution.
Trip ifShort interest rises above 38%, more than 9 percentage points above the current 29%, indicating bearish professional conviction is intensifying rather than being converted by positive data.