Is Vanda Pharmaceuticals, Inc. overvalued or undervalued?

As of 8 May 2024, Vanda Pharmaceuticals, Inc. has moved from a valuation grade of very expensive to risky. The company is currently considered overvalued. Key ratios indicate significant financial distress, with a price-to-book value of 0.53 and an EV to EBITDA ratio of 1.00, both suggesting that the company's valuation metrics are unfavorable compared to its peers. The return on equity (ROE) stands at -8.65%, highlighting ongoing losses and operational challenges.
In comparison to its peers, Vanda Pharmaceuticals shows a stark contrast with Phibro Animal Health Corp., which boasts a P/E ratio of 21.68, indicating a much healthier valuation. Additionally, Soleno Therapeutics, Inc. has a P/E ratio of -20.32, further emphasizing the difficulties faced by Vanda. The company's stock has underperformed significantly against the S&P 500 over various time frames, with a one-year return of -26.96% compared to the index's 10.26%, reinforcing the notion that Vanda Pharmaceuticals is currently overvalued in the market.