Pre-Q3 Earnings: Is Viking Therapeutics Stock a Portfolio Must-Have?

Viking Therapeutics VKTX is set to report third-quarter 2025 earnings on Oct. 22, after market close. Since the company lacks a marketed drug in its portfolio, no revenues are expected to be recorded. The Zacks Consensus Estimate for earnings is pegged at a loss of 70 cents per share. Loss estimates for 2025 have widened from $2.39 to $2.45 per share in the past 60 days.Image Source: Zacks Investment ResearchVKTX’s Earnings Surprise HistoryThe biotech firm’s performance has been dismal over the past four quarters. Its earnings missed estimates in three of the trailing four quarters and beat the mark on one occasion, delivering a negative average surprise of 15.65%. In the last reported quarter, Viking’s earnings missed estimates by 31.82%.Image Source: Zacks Investment ResearchWhat Our Model Predicts for VKTXPer 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 good chance 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 #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping VKTX’s Upcoming ResultsWith no approved/marketed product in its portfolio, Vikings' third-quarter investor call is likely to focus on pipeline updates, which include three candidates — VK2735 (for obesity), VK2809 (for non-alcoholic steatohepatitis [NASH]) and VK0214 (for X-linked adrenoleukodystrophy [X-ALD]).Viking Therapeutics recently started a late-stage program evaluating the subcutaneous (SC) formulation of VK2735 for adults with obesity. This program consists of two phase III studies — the VANQUISH-1 and VANQUISH-2. While the VANQUISH-1 study is enrolling obese adults with at least one weight-related co-morbid condition and without type II diabetes (T2D), the VANQUISH-2 study will enroll obese or overweight adults with T2D. Investors are likely to expect updates on the enrolment progress of both studies.Investors would also seek an update from the company on the oral version of VK2735 after it reported mixed top-line results from a mid-stage study a couple of months back. Though patients on the highest drug dose lost up to 12.2% of their body weight after 13 weeks of daily dosing compared with 1.3% in the placebo group, a significant number of patients dropped out of the study due to adverse effects. We expect Viking to provide an update on how it plans to address the issues.We also expect the company to provide an update on its internally developed dual amylin and calcitonin receptor agonist (DACRA) candidate. VKTX had previously announced plans to file an investigational new drug (IND) application with the FDA for the candidate before the end of this year to start clinical studies in the obesity indication.We expect VKTX to provide updates on its NASH and X-ALD drugs, including progress on the collaboration prospects for both programs.Nevertheless, a single 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 & ValuationYear to date, the stock has lost nearly 14% againstthe industry’s 9% growth. It has also underperformed the broader Medical sector and the S&P 500 Index, as seen in the chart below.VKTX Stock Underperforms Industry, Sector & S&P 500Image Source: Zacks Investment ResearchFrom a valuation standpoint, Viking is trading at a premium to the industry. Going by the price/book ratio, the stock currently trades at 4.91 times trailing 12-month book value, which is more than 3.41 for the industry. The stock is also trading above its five-year mean of 3.48.Image Source: Zacks Investment ResearchOur Investment Thesis on VKTX StockViking Therapeutics maintains a solid financial footing, with $808 million in cash (as of June 2025) and no outstanding debt, providing ample liquidity to fund ongoing operations and R&D efforts. However, the company continues to face structural challenges, primarily its lack of a stable revenue stream and exposure to intense competition from major players such as Eli Lilly LLY and Novo Nordisk NVO.In the obesity treatment segment, Viking is attempting to carve out space in a market dominated by Lilly and Novo. The demand for obesity drugs remains strong, offering significant potential for new entrants. Yet, the recent mixed-stage data from Viking’s oral candidate VK2735 have raised concerns about tolerability and safety, complicating the drug’s competitive positioning. Moreover, the landscape is shifting rapidly as both Lilly and Novo advance toward oral pills. Novo’s oral Wegovy is already under FDA review, while Lilly plans to file for approval of its oral GLP-1 pill, orforglipron, by this year’s end. These developments could narrow Viking’s window of opportunity.Beyond obesity, Viking’s NASH and X-ALD programs have delivered encouraging early results, but the company’s limited resources have prompted management to pursue partnership opportunities to support further clinical development.How to Play the Stock?The stock’s premium valuation and downward revisions to earnings estimates make it difficult to justify building or increasing positions at this stage. Until the company resolves the tolerability issues related to oral VK2735, we advise investors to steer clear of the stock.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report Viking Therapeutics, Inc. (VKTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks