Investors seeking growth at a reasonable cost should explore NASDAQ:VRTX.

Here's VERTEX PHARMACEUTICALS INC (NASDAQ:VRTX) for you, a growth stock our stock screener believes is undervalued. NASDAQ:VRTX is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Growth Examination for NASDAQ:VRTX

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:VRTX has received a 7 out of 10:

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

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:

• Compared to the rest of the industry, the Price/Earnings ratio of VRTX indicates a rather cheap valuation: VRTX is cheaper than 95.29% of the companies listed in the same industry.
• Based on the Price/Forward Earnings ratio, VRTX is valued cheaply inside the industry as 93.89% of the companies are valued more expensively.
• VRTX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. VRTX is cheaper than 95.11% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, VRTX is valued cheaply inside the industry as 96.34% of the companies are valued more expensively.
• VRTX has an outstanding profitability rating, which may justify a higher PE ratio.

Analyzing Health Metrics

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:

• An Altman-Z score of 15.61 indicates that VRTX is not in any danger for bankruptcy at the moment.
• VRTX's Altman-Z score of 15.61 is amongst the best of the industry. VRTX outperforms 91.80% 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.
• VRTX has a Debt to FCF ratio of 0.10. This is amongst the best in the industry. VRTX outperforms 97.56% of its industry peers.
• 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.
• VRTX has a Quick Ratio of 3.29. This indicates that VRTX is financially healthy and has no problem in meeting its short term obligations.

What does the Profitability looks like for NASDAQ:VRTX

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:VRTX was assigned a score of 8 for profitability:

• VRTX has a better Return On Assets (16.81%) than 98.43% of its industry peers.
• The Return On Equity of VRTX (21.67%) is better than 97.38% of its industry peers.
• The Return On Invested Capital of VRTX (16.79%) is better than 97.56% of its industry peers.
• VRTX had an Average Return On Invested Capital over the past 3 years of 19.51%. This is above the industry average of 15.45%.
• Looking at the Profit Margin, with a value of 39.46%, VRTX belongs to the top of the industry, outperforming 99.30% of the companies in the same industry.
• Looking at the Operating Margin, with a value of 41.16%, VRTX belongs to the top of the industry, outperforming 99.30% of the companies in the same industry.
• VRTX's Operating Margin has improved in the last couple of years.
• VRTX's Gross Margin of 86.86% is amongst the best of the industry. VRTX outperforms 90.92% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Check the latest full fundamental report of VRTX for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.