SRPT
Sarepta Therapeutics, Inc.
$16.80
Distressed or Transitioning
75%
Current EPS × Depressed Multiple
Moderate
·
Conviction
Fair Value
Trading 15.9% below fair value
You pay
$16.80
Bear
$13.32
Fair
$19.98
Bull
$26.64
Bear
$13.32
-20.7%
EPS continues to decline, 5x multiple
Fair
$19.98
+18.9%
Current EPS stabilizes, 8x multiple
Bull
$26.64
+58.6%
Credible recovery, multiple re-rates to 10x
Key Value Driver
Whether the core business model is intact or structurally impaired
Implied Market Multiple
7.2x
Summary
Our base-case estimate uses Current EPS × Depressed Multiple. We then blend that result with the average analyst price target of $24.50 from 54 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $19.98 per share.
Warnings
Don't assume past cash flow levels will return — the company's troubles may have permanently reduced its ability to generate profits.
A stock can look cheap on paper and still lose half its value if the underlying business is permanently damaged.
The wide range between our best and worst cases is intentional — pretending to know a precise value for a troubled company would be misleading.
Wall Street's average price target is $24.50 (from 54 analysts). Our estimate is 28% below the consensus -- consider that gap carefully.
Key Risks
- Bullish DCF projections are fundamentally unknowable for distressed companies
- M&A speculation can floor the stock above intrinsic value temporarily
- Management credibility is a key input — new CEO expands the bull case