Stock Analysis

Vanda Pharmaceuticals Inc. Just Missed EPS By 7.7%: Here's What Analysts Think Will Happen Next

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The investors in Vanda Pharmaceuticals Inc.'s (NASDAQ:VNDA) will be rubbing their hands together with glee today, after the share price leapt 30% to US$18.67 in the week following its full-year results. It looks like the results were a bit of a negative overall. While revenues of US$248m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.7% to hit US$0.42 per share. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

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NasdaqGM:VNDA Earnings and Revenue Growth February 12th 2021

Following the latest results, Vanda Pharmaceuticals' one analyst are now forecasting revenues of US$279.4m in 2021. This would be a decent 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 34% to US$0.57. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$279.4m and earnings per share (EPS) of US$0.57 in 2021. The consensus analyst doesn't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$18.00, suggesting that the company has met expectations in its recent result.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analyst, with revenue forecast to grow 13%, in line with its 15% annual growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 21% next year. So although Vanda Pharmaceuticals is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analyst holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$18.00, with the latest estimates not enough to have an impact on their price target.

With that in mind, we wouldn't be too quick to come to a conclusion on Vanda Pharmaceuticals. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Vanda Pharmaceuticals , and understanding these should be part of your investment process.

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What are the risks and opportunities for Vanda Pharmaceuticals?

Vanda Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of therapies to address high unmet medical needs.

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  • Trading at 40.1% below our estimate of its fair value

  • Earnings are forecast to grow 42.5% per year


  • Significant insider selling over the past 3 months

  • Profit margins (2.5%) are lower than last year (12.8%)

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