Sarepta (SRPT)

Known for developing one of the most expensive gene therapies in the world, the biotech company, Sarepta Therapeutics (SRPT), stock is currently trading at a bargain price—making it a top stock to buy now if you’re aiming for high risk, high reward returns.

Sarepta’s gene therapy, Elevidys, is designed to treat Duchenne muscular dystrophy (DMD), a fatal muscle-wasting disease that affects mostly boys. Although Sarepta recently reported sales that missed analysts’ estimates, the company’s long-term potential is enormous, thanks to expanded approval from the FDA. Sarepta is now looking at an annual revenue opportunity that could exceed $3 billion. While some investors are worried about manufacturing challenges and competition from emerging therapies, Sarepta’s CEO, Doug Ingram, is confident in the company’s future.

“We’re not the same biotech company that lives and dies by one milestone,” says Ingram. “We’ve successfully launched four drugs, we’re profitable, and we’re consistently cash-flow positive.”

If you’re serious about winning your class stock market game, Sarepta could be a strategic play for you. In a high-risk, high-reward strategy, momentum trading—where you buy a stock that’s already on the move—could give you an edge. Sarepta’s stock has seen significant volatility, shooting up 30% in one day after its FDA approval in June. Although it’s come down since then, this makes it a great opportunity for short-term traders looking to capitalize on price swings.

Short-term trading, like what you’ll do in the stock market game, is very different from long-term investing. For long-term financial growth, investors typically seek stability and gradual returns. Sarepta might not be a long-term play due to its high volatility, but in a competition where short-term gains are crucial, a biotech stock like this can deliver the explosive returns you need to win.

However, it’s important to understand the risks involved. Biotech stocks like Sarepta are notoriously volatile, and while they can deliver big wins in the short term, they can also lead to significant losses. “The key to winning a stock market game is understanding the difference between short-term momentum and long-term growth,” says Kostas Biliouris, an analyst at BMO Capital Markets. “Sarepta offers an intriguing short-term opportunity, but it’s not necessarily the stock you’d hold onto for years if you’re trying to build sustainable wealth.”

For your competition, momentum trading in a high-risk, high-reward stock like Sarepta might just be your ticket to victory. Keep in mind, though, that this kind of strategy is about seizing short-term opportunities—it’s not meant for building a long-term portfolio.

Sarepta’s commercial success hinges on its unique position in treating DMD, and with limited competition and strong demand from patient advocacy groups, this company’s prospects are solid for the next few years. “Insurers don’t really have a choice but to cover the drug,” says Biliouris. “There may be some pushback on price, but the risk of public outcry is too high for insurers to deny coverage.”

If you’re betting on Sarepta in the stock market game, consider that its stock may rise as the company expands its manufacturing and overcomes reimbursement challenges. With FDA approval and demand for the treatment high, analysts like Biliouris believe Sarepta could meet or exceed revenue targets next year, which could push the stock up even further. This creates a potential short-term momentum play that could make all the difference in your stock market game results.

Keep in mind that while Sarepta’s stock is a promising pick for high school students looking to win the stock market game, it’s not recommended for long-term, risk-averse investors. In the context of your class competition, however, Sarepta’s potential for big, fast gains makes it a top stock to buy now.