News Flash: Analysts Just Made A Sizeable Upgrade To Their Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) Forecasts
Celebrations may be in order for Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Vanda Pharmaceuticals too, with the stock up 15% to US$4.16 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the latest upgrade, the current consensus, from the one analyst covering Vanda Pharmaceuticals, is for revenues of US$188m in 2024, which would reflect a measurable 2.4% reduction in Vanda Pharmaceuticals' sales over the past 12 months. Statutory earnings per share are supposed to nosedive 77% to US$0.01 in the same period. Yet before this consensus update, the analyst had been forecasting revenues of US$149m and losses of US$0.46 per share in 2024. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.
View our latest analysis for Vanda Pharmaceuticals
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 2.4% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 2.4% 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 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vanda Pharmaceuticals is expected to lag the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that the consensus now expects Vanda Pharmaceuticals to become profitable this year. Pleasantly, the analyst also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. More bullish expectations could be a signal for investors to take a closer look at Vanda Pharmaceuticals.
The covering analyst is definitely bullish on Vanda Pharmaceuticals, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. You can learn more, and discover the 1 other flag we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.
