Some Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) shareholders are probably rather concerned to see the share price fall 30% over the last three months. In contrast, the return over three years has been impressive. In three years the stock price has launched 146% higher: a great result. So the recent fall in the share price should be viewed in that context. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Vanda Pharmaceuticals became profitable within the last three years. Given the importance of this milestone, it’s not overly surprising that the share price has increased strongly.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Vanda Pharmaceuticals has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Vanda Pharmaceuticals shareholders gained a total return of 4.8% during the year. But that return falls short of the market. On the bright side, the longer term returns (running at about 5.7% a year, over half a decade) look better. It’s quite possible the business continues to execute with prowess, even as the share price gains are slowing. If you would like to research Vanda Pharmaceuticals in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.