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Vanda Pharmaceuticals Inc. (NASDAQ:VNDA): Will The Growth Last?

Simply Wall St

Looking at Vanda Pharmaceuticals Inc.'s (NASDAQ:VNDA) earnings update on 31 March 2019, it seems that analyst expectations are fairly bearish, as a 16% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 21%. Currently with trailing-twelve-month earnings of US$25m, we can expect this to reach US$29m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

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View our latest analysis for Vanda Pharmaceuticals

Can we expect Vanda Pharmaceuticals to keep growing?

The longer term expectations from the 5 analysts of VNDA is tilted towards the 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, May 21st 2019

This results in an annual growth rate of 33% based on the most recent earnings level of US$25m to the final forecast of US$63m by 2022. EPS reaches $0.60 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 22% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Vanda Pharmaceuticals, I've compiled three important aspects 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.