Viking Therapeutics VKTX is set to report fourth-quarter and full-year 2024 earnings on Feb. 5, after market close. Since the company lacks a marketed drug in its portfolio, we do not expect it to record revenues. The Zacks Consensus Estimate for earnings is pegged at a loss of 27 cents per share. Estimates for 2025 loss per share have improved slightly from $1.42 to $1.41 in the past 60 days.

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VKTX’s Earnings Surprise History

The biotech firm’s performance has been decent over the past four quarters. Its earnings beat estimates in three of the trailing four quarters and met the mark on one occasion, delivering an average surprise of 8.78%. In the last reported quarter, Viking reported an earnings surprise of 8.33%.

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What Our Model Predicts for VKTX

Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) have a goodchance of delivering an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Viking has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping VKTX’s Upcoming Results

Without any approved/marketed product in its portfolio, the focus of the fourth-quarter investor call will be on updates related to Viking's pipeline, which includes three candidates — VK2735 (for obesity), VK2809 (for non-alcoholic steatohepatitis [NASH]) and VK0214 (for X-linked adrenoleukodystrophy [X-ALD]).

Earlier this month, Viking announced that it has started the phase II VENTURE-Oral Dosing study to evaluate the safety and efficacy of the oral version of VK2735 over a 13-week treatment period. VKTX also announced plans to start a late-stage study on the subcutaneous (SC) formulation of VK2735 by the first half of 2025. Investors would likely seek an update from management on this late-stage study’s design.

They would also seek an update from management on the company’s progress with its plans for advancing the internally developed dual amylin and calcitonin receptor agonist (DACRA) candidate to clinical development. VKTX had previously announced plans to file an investigational new drug (IND) application for this candidate in obesity indication before this year’s end.

We also expect management to provide an update on its discussions with the FDA for advancing VK2809 to late-stage development.

Nevertheless, asingle quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether it would be a prudent move to buy, sell, or hold the stock at present.

VKTX’s Stock Price Performance & Valuation

In the past year, the stock has risen over 40% against the industry’s 11% decline. It has also outperformed the broader Medical sector and the S&P 500 Index. However, Viking’s shares are currently trading below its 50-day and 200-day moving averages.

VKTX Stock Outperforms Industry, Sector & S&P 500

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Viking is trading at a premium to the industry, as seen in the chart below. Going by the price/book ratio, the company’s shares currently trade at 4.09, trailing 12-month book value, which is more than 3.56 for the industry.

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Our Investment Thesis on VKTX Stock

While Viking has its fair share of problems, like the lack of marketed drugs and the presence of pharma giants in targeted markets, its strong cash balance (about $930 million as of September 2024 end) and zero debt ensure that it can sufficiently fund its day-to-day operations, including late-stage pipeline programs.

Though the competitive landscape in the obesity space seems tough, with pharma bigwigs like Eli Lilly LLY and Novo Nordisk NVO being the market leaders, the rising demand for obesity drugs represents a lucrative opportunity for new entrants like Viking, which aims to grab a small share of this booming market.

Per a research conducted by Goldman Sachs, the obesity market in the United States could reach $100 billion by 2030. It is likely due to this potential demand that shares of Viking have skyrocketed over 400% in the past five years, immensely boosting shareholder value despite the lack of a stable revenue stream.

Viking’s encouraging progress with its NASH and X-ALD candidates shows that management has a diverse growth strategy in place.

Stay Invested in VKTX Stock

While shares of VKTX are trading at a premium to the industry, we believe the company has strong growth potential. Those who already own this stock should continue to do so. Multiple catalysts could trigger share price movements, such as pipeline advancements, data from key studies and potential drug approvals.

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