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Vanda (VNDA) Surges 24.2%: Is This an Indication of Further Gains?

Vanda Pharmaceuticals (VNDA) shares ended the last trading session 24.2% higher at $6.27. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 5.8% loss over the past four weeks.

The sudden surge in the stock price was observed after Vanda Pharma announced that Cycle Group Holdings Ltd. extended an unsolicited, non-binding indication of interest to acquire it for $8 per share in cash. Vanda is currently reviewing and evaluating the same to determine the best course of action, favoring itself and its shareholders. Until the review is complete, the company will refrain from commenting on the indication of interest.

This biopharmaceutical company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of -33.3%. Revenues are expected to be $47.5 million, up 3.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.


For Vanda, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on VNDA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Vanda is a member of the Zacks Medical - Biomedical and Genetics industry. One other stock in the same industry, Affimed N.V. (AFMD), finished the last trading session 4.4% lower at $6.31. AFMD has returned 26.2% over the past month.

Affimed N.V.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$1.82. Compared to the company's year-ago EPS, this represents a change of +20.9%. Affimed N.V. currently boasts a Zacks Rank of #2 (Buy).

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