VNDA
Vanda Pharmaceuticals Inc.
$6.19
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 22.4% below fair value
You pay
$6.19
Bear
$6.83
Fair
$7.97
Bull
$9.11
Bear
$6.83
+10.4%
$0.42 × 12x P/E
Fair
$7.97
+28.8%
$0.42 × 14x P/E
Bull
$9.11
+47.2%
$0.42 × 16x P/E
Key Value Driver
Normalized P/E multiple (14x base case)
Implied Market Multiple
14.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $14.25 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $7.97 per share.
Warnings
Wall Street's average price target is $14.25 (from 19 analysts). Our estimate is 59% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples