Sarepta Therapeutics, Inc. (SRPT): A Bull Case Theory

We came across a bullish thesis on Sarepta Therapeutics, Inc. on Alpha Talon Investment Research’s Substack by AT Investment Research. In this article, we will summarize the bulls’ thesis on SRPT. Sarepta Therapeutics, Inc.'s share was trading at $21.55 as of December 15th. SRPT’s trailing and forward P/E were 169.47 and 17.39 respectively according to Yahoo Finance.

Sarepta Therapeutics, Inc., a commercial-stage biopharmaceutical company, focuses on the discovery and development of RNA-targeted therapeutics, gene therapies, and other genetic therapeutic modalities for the treatment of rare diseases. SRPT’s Q3 2025 results marked a turning point from optimism to survival mode, as an apparent earnings beat failed to prevent a collapse in investor confidence.

The company reported $399.4 million in revenue, ahead of expectations, and a narrower-than-expected adjusted loss, but revenue declined 14.5% year over year after Sarepta halted Elevidys shipments to non-ambulatory patients amid safety concerns. On a GAAP basis, the company swung to a $179.9 million loss, reflecting restructuring charges and losses tied to debt refinancing, underscoring that the commercial foundation of its Duchenne muscular dystrophy (DMD) franchise is under strain despite still-solid gross margins around the low 60% range.

The decisive blow came from the ESSENCE Phase 3 trial, which failed to meet its primary endpoint for Sarepta’s exon-skipping therapies, Amondys 45 and Vyondys 53. Because this study was required to convert accelerated approvals into full approvals, the non-significant result raised serious regulatory risk, including potential label restrictions or withdrawal.

Management’s emphasis on secondary endpoints and pandemic-related disruptions did little to reassure markets, especially with Elevidys already facing heightened scrutiny following safety incidents and patient deaths. Together, these issues undermined the credibility of Sarepta’s core platforms and triggered a sharp repricing of future cash flows.

Despite this, Sarepta is not facing immediate insolvency. The company holds roughly $865 million in cash, generates close to $2 billion in annualized revenue, and has launched a restructuring expected to cut costs by about $400 million annually by 2026. At around $15 per share, the stock trades below 0.5x sales, implying near-total franchise impairment. Any constructive FDA outcome on ESSENCE or Elevidys could drive a meaningful rerating, but absent regulatory clarity, Sarepta remains a binary, high-risk recovery story rather than a growth biotech.

Previously we covered a bullish thesis on Sarepta Therapeutics, Inc. by Two Natural Capital in December 2024, which highlighted the company’s leadership in DMD therapies, ELEVIDYS growth potential, and a diversified gene therapy and RNA pipeline. The company's stock price has depreciated approximately by 83% since our coverage. This is because regulatory setbacks and the ESSENCE trial failure weighed on sentiment. The thesis still stands as Sarepta retains liquidity and commercial revenue. AT Investment Research shares a similar but emphasizes on regulatory resolution and recovery-driven upside.

Sarepta Therapeutics, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held SRPT at the end of the third quarter which was 41 in the previous quarter. While we acknowledge the risk and potential of SRPT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SRPT and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.