Wall Street Bulls Look Optimistic About Viking Therapeutics (VKTX): Should You Buy?

Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable, particularly for Viking Therapeutics, Inc. (VKTX) [1][5][10] Group 1: Brokerage Recommendations - Viking Therapeutics has an average brokerage recommendation (ABR) of 1.32, indicating a consensus between Strong Buy and Buy, based on 19 brokerage firms [2] - Out of the 19 recommendations, 16 are Strong Buy, accounting for 84.2% of the total recommendations [2] - Despite the positive ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often fail to guide investors effectively [5][10] Group 2: Analyst Bias and Zacks Rank - Brokerage analysts tend to exhibit a positive bias due to their firms' vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [6][10] - The Zacks Rank, a proprietary stock rating tool, categorizes stocks based on earnings estimate revisions and is considered a more reliable indicator of near-term price performance compared to ABR [8][11] - The Zacks Rank is updated more frequently and reflects current earnings estimates, making it a timely tool for predicting stock price movements [12] Group 3: Current Earnings Estimates for VKTX - The Zacks Consensus Estimate for Viking Therapeutics has declined by 2.4% over the past month to -$2.48, indicating growing pessimism among analysts regarding the company's earnings prospects [13] - This decline in earnings estimates has resulted in a Zacks Rank of 4 (Sell) for Viking Therapeutics, suggesting caution despite the favorable ABR [14]