Sarepta Therapeutics Inc

Sarepta Therapeutics Inc (NASDAQ: SRPT) is a biotechnology company focused on developing drugs for infectious diseases and a diverse range of other diseases.

Investment Rationale – WATCH at USD 69.11

• On the profitability front, the consensus estimates indicated that the Company would continue to remain loss-making for three more years (FY21 to FY23).
• Despite reporting an increase in Q1 FY21 revenue, the Company had incurred a net loss more than the revenue.
• The write-offs of certain batches of EXONDYS 51 had resulted in an increase in the cost of sales during Q1 FY21 as compared to Q1 FY20.
• From a technical standpoint, SRPT is sustaining lower than the 20-days exponential moving average of USD 71.81, indicating a correction in the stock price.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the weak profitability and lower top-line revenue, we have given a “WATCH” recommendation on Sarepta Therapeutics Inc at the closing market price of USD 69.11 (as of 22 July 2021).

Lithium Americas Corp

Lithium Americas Corp (NYSE: LAC) is a Canada-based resource company with operational projects in Argentina and Nevada.

Investment Rationale – WATCH at USD 13.65

• With regards to the top-line business, the Company had not generated any revenue from the last three years and Q1 FY21 as well.
• The consensus estimates had indicated that the Company would remain loss-making for the next five quarters.
• The stock is highly volatile as it dropped by more than 45% from a 52-weeks high reached on 19 January 2021.
• From a technical standpoint, the MACD line fell below the signal line, indicating a correction in the stock price.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the negligible top-line business and weak profitability, we have given a “WATCH” recommendation on Lithium Americas Corp at the closing market price of USD 13.65 (as of 22 July 2021).

XL Fleet Corp

XL Fleet Corp (NYSE: XL) is the provider of fleet electrification solutions for commercial vehicles in North America. 

On 21 December 2020, a special purpose acquisition entity, Pivotal Investment Corporation II, completed the business combination with XL Fleet and began trading from 22 December 2020 as a combined entity under the ticker symbols "XL". Therefore, the earlier given recommendation on the delisted entity-Pivotal Investment Corporation II was closed at the closing price on the last trading day i.e., 21 December 2020, at USD 19.54.

Investment Rationale – Avoid at USD 6.97

• With regards to the top-line business, the Company had posted a decline in revenue from USD 1.23 million during Q1 FY20 to USD 0.68 million for Q1 FY21.
• The shortage of semiconductors may increase the cost levels and hamper the growth prospects.
• On the profitability front, the Company had widened the net loss by more than four times during FY20 as compared to FY19.
• On a YTD basis, the stock price plunged almost 65%.
• From a technical standpoint, XL is trading lower than the 20-days exponential moving average of USD 7.32, indicating a correction in the stock price.

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group)

Conclusion

Based on the volatile nature of the stock and a drop in top-line revenue during Q1 FY21, we have given an “AVOID” recommendation on XL Fleet Corp at the closing market price of USD 6.97 (as of 22 July 2021).

*The reference data in this report has been partly sourced from REFINITIV.

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