How Do Analysts See Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) Performing In The Year Ahead?

On 30 June 2019, Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) released its earnings update. Generally, it seems that analyst forecasts are substantially optimistic, as a 63% rise in profits is expected in the upcoming year, compared with the previous 5-year average growth rate of 22%. With trailing-twelve-month net income at current levels of US$25m, we should see this rise to US$41m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for Vanda Pharmaceuticals

Exciting times ahead?

Longer term expectations from the 5 analysts covering VNDA’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of VNDA’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NasdaqGM:VNDA Past and Future Earnings, August 12th 2019
NasdaqGM:VNDA Past and Future Earnings, August 12th 2019

By 2022, VNDA’s earnings should reach US$59m, from current levels of US$25m, resulting in an annual growth rate of 28%. EPS reaches $1.0 in the final year of forecast compared to the current $0.50 EPS today. Margins are currently sitting at 13%, which is expected to expand to 20% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Vanda Pharmaceuticals, there are three important factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Vanda Pharmaceuticals worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Vanda Pharmaceuticals is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Vanda Pharmaceuticals? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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 editorial-team@simplywallst.com. 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.