Would Shareholders Who Purchased Vanda Pharmaceuticals'(NASDAQ:VNDA) Stock Three Years Be Happy With The Share price Today?

NASDAQ:VNDA) shareholders, since the share price is down 27% in the last three years, falling well short of the market return of around 46%. And more recent buyers are having a tough time too, with a drop of 23% in the last year. There was little comfort for shareholders in the last week as the price declined a further 2.7%.” data-reactid=”28″>For many investors, the main point of stock picking is to generate higher returns than the overall market. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that’s been the case for longer term Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) shareholders, since the share price is down 27% in the last three years, falling well short of the market return of around 46%. And more recent buyers are having a tough time too, with a drop of 23% in the last year. There was little comfort for shareholders in the last week as the price declined a further 2.7%.

Check out our latest analysis for Vanda Pharmaceuticals ” data-reactid=”29″>Check out our latest analysis for Vanda Pharmaceuticals

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Vanda Pharmaceuticals became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. So it’s worth looking at other metrics to try to understand the share price move.

We note that, in three years, revenue has actually grown at a 15% annual rate, so that doesn’t seem to be a reason to sell shares. This analysis is just perfunctory, but it might be worth researching Vanda Pharmaceuticals more closely, as sometimes stocks fall unfairly. This could present an opportunity.

The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

interactive graphic.” data-reactid=”50″>It is of course excellent to see how Vanda Pharmaceuticals has grown profits over the years, but the future is more important for shareholders. You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.” data-reactid=”52″>Investors in Vanda Pharmaceuticals had a tough year, with a total loss of 23%, against a market gain of about 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.0% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example – Vanda Pharmaceuticals has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

list of companies we expect will grow earnings.” data-reactid=”53″>Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”55″>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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected].