While growth is established for NASDAQ:VRTX, the stock's valuation remains reasonable.

Last update: May 29, 2024

Discover VERTEX PHARMACEUTICALS INC (NASDAQ:VRTX), an undervalued growth gem identified by our stock screener. NASDAQ:VRTX is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Unpacking NASDAQ:VRTX's Growth Rating

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:VRTX, the assigned 7 reflects its growth potential:

VRTX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.41%, which is quite good.
The Earnings Per Share has been growing by 30.06% on average over the past years. This is a very strong growth
VRTX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.61%.
Measured over the past years, VRTX shows a very strong growth in Revenue. The Revenue has been growing by 26.49% on average per year.
Based on estimates for the next years, VRTX will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.08% on average per year.
The Revenue is expected to grow by 9.42% on average over the next years. This is quite good.

A Closer Look at Valuation for NASDAQ:VRTX

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:VRTX has earned a 5 for valuation:

Based on the Price/Earnings ratio, VRTX is valued cheaper than 95.34% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, VRTX is valued cheaply inside the industry as 94.13% of the companies are valued more expensively.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VRTX indicates a rather cheap valuation: VRTX is cheaper than 95.34% of the companies listed in the same industry.
96.37% of the companies in the same industry are more expensive than VRTX, based on the Price/Free Cash Flow ratio.
The excellent profitability rating of VRTX may justify a higher PE ratio.

What does the Health looks like for NASDAQ:VRTX

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:VRTX, the assigned 7 for health provides valuable insights:

VRTX has an Altman-Z score of 15.02. This indicates that VRTX is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of VRTX (15.02) is better than 90.50% of its industry peers.
VRTX has a debt to FCF ratio of 0.10. This is a very positive value and a sign of high solvency as it would only need 0.10 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.10, VRTX belongs to the best of the industry, outperforming 97.58% of the companies in the same industry.
VRTX has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
A Current Ratio of 3.50 indicates that VRTX has no problem at all paying its short term obligations.
A Quick Ratio of 3.29 indicates that VRTX has no problem at all paying its short term obligations.

Exploring NASDAQ:VRTX's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:VRTX, the assigned 8 is a significant indicator of profitability:

Looking at the Return On Assets, with a value of 16.81%, VRTX belongs to the top of the industry, outperforming 98.45% of the companies in the same industry.
With an excellent Return On Equity value of 21.67%, VRTX belongs to the best of the industry, outperforming 97.24% of the companies in the same industry.
VRTX has a better Return On Invested Capital (16.79%) than 97.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for VRTX is above the industry average of 14.58%.
The Profit Margin of VRTX (39.46%) is better than 99.31% of its industry peers.
VRTX has a better Operating Margin (41.16%) than 99.31% of its industry peers.
In the last couple of years the Operating Margin of VRTX has grown nicely.
The Gross Margin of VRTX (86.86%) is better than 91.02% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of VRTX

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.