One Forecaster Is Now More Bearish On Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) Than They Used To Be

Market forces rained on the parade of Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the latest downgrade, the solitary analyst covering Vanda Pharmaceuticals provided consensus estimates of US$212m revenue in 2023, which would reflect an uneasy 17% decline on its sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$0.44 in 2023, a sharp decline from a profit over the last year. Before this latest update, the analyst had been forecasting revenues of US$248m and earnings per share (EPS) of US$0.34 in 2023. So we can see that the consensus has become notably more bearish on Vanda Pharmaceuticals' outlook with these numbers, making a measurable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for Vanda Pharmaceuticals

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 8.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. It's pretty clear that Vanda Pharmaceuticals' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Vanda Pharmaceuticals dropped from profits to a loss this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Vanda Pharmaceuticals' revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Vanda Pharmaceuticals, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.