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VERTEX INC - CLASS A (VERX) Stock Fundamental Analysis

NASDAQ:VERX - Nasdaq - US92538J1060 - Common Stock

57  +0.6 (+1.06%)

After market: 57 0 (0%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to VERX. VERX was compared to 285 industry peers in the Software industry. While VERX is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, VERX is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

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5

1. Profitability

1.1 Basic Checks

VERX had positive earnings in the past year.
In the past year VERX had a positive cash flow from operations.
VERX had negative earnings in 4 of the past 5 years.
VERX had a positive operating cash flow in each of the past 5 years.
VERX Yearly Net Income VS EBIT VS OCF VS FCFVERX Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2018 2019 2020 2021 2022 2023 0 50M -50M -100M

1.2 Ratios

With a decent Return On Assets value of 2.55%, VERX is doing good in the industry, outperforming 68.82% of the companies in the same industry.
The Return On Equity of VERX (11.74%) is better than 82.08% of its industry peers.
VERX has a Return On Invested Capital of 0.90%. This is in the better half of the industry: VERX outperforms 64.52% of its industry peers.
Industry RankSector Rank
ROA 2.55%
ROE 11.74%
ROIC 0.9%
ROA(3y)-1.22%
ROA(5y)-1.07%
ROE(3y)-3.73%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
VERX Yearly ROA, ROE, ROICVERX Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2018 2019 2020 2021 2022 2023 0 -20 -40 -60 -80

1.3 Margins

VERX has a Profit Margin of 4.73%. This is in the better half of the industry: VERX outperforms 69.18% of its industry peers.
Looking at the Operating Margin, with a value of 1.30%, VERX is in the better half of the industry, outperforming 64.52% of the companies in the same industry.
The Gross Margin of VERX (62.59%) is comparable to the rest of the industry.
VERX's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 1.3%
PM (TTM) 4.73%
GM 62.59%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.92%
GM growth 5Y-1.25%
VERX Yearly Profit, Operating, Gross MarginsVERX Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2018 2019 2020 2021 2022 2023 0 20 -20 40 60

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3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VERX is destroying value.
Compared to 1 year ago, VERX has more shares outstanding
The number of shares outstanding for VERX has been increased compared to 5 years ago.
Compared to 1 year ago, VERX has an improved debt to assets ratio.
VERX Yearly Shares OutstandingVERX Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 50M 100M 150M
VERX Yearly Total Debt VS Total AssetsVERX Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 200M 400M 600M

2.2 Solvency

VERX has an Altman-Z score of 6.26. This indicates that VERX is financially healthy and has little risk of bankruptcy at the moment.
VERX has a better Altman-Z score (6.26) than 69.53% of its industry peers.
VERX has a debt to FCF ratio of 19.81. This is a negative value and a sign of low solvency as VERX would need 19.81 years to pay back of all of its debts.
VERX's Debt to FCF ratio of 19.81 is in line compared to the rest of the industry. VERX outperforms 46.24% of its industry peers.
VERX has a Debt/Equity ratio of 1.29. This is a high value indicating a heavy dependency on external financing.
VERX's Debt to Equity ratio of 1.29 is on the low side compared to the rest of the industry. VERX is outperformed by 79.93% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.29
Debt/FCF 19.81
Altman-Z 6.26
ROIC/WACC0.08
WACC11.18%
VERX Yearly LT Debt VS Equity VS FCFVERX Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2018 2019 2020 2021 2022 2023 0 100M -100M 200M

2.3 Liquidity

VERX has a Current Ratio of 1.04. This is a normal value and indicates that VERX is financially healthy and should not expect problems in meeting its short term obligations.
VERX's Current ratio of 1.04 is on the low side compared to the rest of the industry. VERX is outperformed by 75.63% of its industry peers.
VERX has a Quick Ratio of 1.04. This is a normal value and indicates that VERX is financially healthy and should not expect problems in meeting its short term obligations.
VERX has a Quick ratio of 1.04. This is in the lower half of the industry: VERX underperforms 75.27% of its industry peers.
Industry RankSector Rank
Current Ratio 1.04
Quick Ratio 1.04
VERX Yearly Current Assets VS Current LiabilitesVERX Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M

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6

3. Growth

3.1 Past

VERX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 73.53%, which is quite impressive.
Looking at the last year, VERX shows a quite strong growth in Revenue. The Revenue has grown by 17.25% in the last year.
Measured over the past years, VERX shows a quite strong growth in Revenue. The Revenue has been growing by 16.01% on average per year.
EPS 1Y (TTM)73.53%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%60%
Revenue 1Y (TTM)17.25%
Revenue growth 3Y15.17%
Revenue growth 5Y16.01%
Sales Q2Q%17.52%

3.2 Future

The Earnings Per Share is expected to grow by 33.14% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 12.03% on average over the next years. This is quite good.
EPS Next Y56.79%
EPS Next 2Y34.63%
EPS Next 3Y33.14%
EPS Next 5YN/A
Revenue Next Year17.97%
Revenue Next 2Y16.3%
Revenue Next 3Y15.77%
Revenue Next 5Y12.03%

3.3 Evolution

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
VERX Yearly Revenue VS EstimatesVERX Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 200M 400M 600M 800M
VERX Yearly EPS VS EstimatesVERX Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0.2 0.4 0.6 0.8

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3

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 96.61 indicates a quite expensive valuation of VERX.
Compared to the rest of the industry, the Price/Earnings ratio of VERX is on the same level as its industry peers.
VERX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.29.
The Price/Forward Earnings ratio is 80.64, which means the current valuation is very expensive for VERX.
The rest of the industry has a similar Price/Forward Earnings ratio as VERX.
VERX's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.44.
Industry RankSector Rank
PE 96.61
Fwd PE 80.64
VERX Price Earnings VS Forward Price EarningsVERX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, VERX is valued a bit cheaper than 60.57% of the companies in the same industry.
VERX's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 526.17
EV/EBITDA 99.15
VERX Per share dataVERX EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 1 -1 2 3 4

4.3 Compensation for Growth

VERX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as VERX's earnings are expected to grow with 33.14% in the coming years.
PEG (NY)1.7
PEG (5Y)N/A
EPS Next 2Y34.63%
EPS Next 3Y33.14%

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0

5. Dividend

5.1 Amount

VERX does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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VERTEX INC - CLASS A

NASDAQ:VERX (1/21/2025, 5:20:02 PM)

After market: 57 0 (0%)

57

+0.6 (+1.06%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-06 2024-11-06/bmo
Earnings (Next)N/A N/A
Inst Owners106.82%
Inst Owner Change0.27%
Ins Owners16.6%
Ins Owner Change-27.25%
Market Cap8.89B
Analysts82.22
Price Target57.77 (1.35%)
Short Float %9.58%
Short Ratio5.89
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.63%
Min EPS beat(2)13.93%
Max EPS beat(2)15.34%
EPS beat(4)4
Avg EPS beat(4)14.01%
Min EPS beat(4)12.52%
Max EPS beat(4)15.34%
EPS beat(8)7
Avg EPS beat(8)12.12%
EPS beat(12)11
Avg EPS beat(12)17.45%
EPS beat(16)15
Avg EPS beat(16)23.44%
Revenue beat(2)1
Avg Revenue beat(2)-0.43%
Min Revenue beat(2)-1.69%
Max Revenue beat(2)0.84%
Revenue beat(4)2
Avg Revenue beat(4)0.52%
Min Revenue beat(4)-1.69%
Max Revenue beat(4)3.7%
Revenue beat(8)4
Avg Revenue beat(8)0.43%
Revenue beat(12)7
Avg Revenue beat(12)0.36%
Revenue beat(16)11
Avg Revenue beat(16)0.95%
PT rev (1m)2.64%
PT rev (3m)38.14%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.5%
EPS NY rev (1m)0%
EPS NY rev (3m)7.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.15%
Valuation
Industry RankSector Rank
PE 96.61
Fwd PE 80.64
P/S 13.82
P/FCF 526.17
P/OCF 51.89
P/B 34.32
P/tB N/A
EV/EBITDA 99.15
EPS(TTM)0.59
EY1.04%
EPS(NY)0.71
Fwd EY1.24%
FCF(TTM)0.11
FCFY0.19%
OCF(TTM)1.1
OCFY1.93%
SpS4.12
BVpS1.66
TBVpS-1.07
PEG (NY)1.7
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 2.55%
ROE 11.74%
ROCE 1.14%
ROIC 0.9%
ROICexc 1.48%
ROICexgc 31.7%
OM 1.3%
PM (TTM) 4.73%
GM 62.59%
FCFM 2.63%
ROA(3y)-1.22%
ROA(5y)-1.07%
ROE(3y)-3.73%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.92%
GM growth 5Y-1.25%
F-Score6
Asset Turnover0.54
Health
Industry RankSector Rank
Debt/Equity 1.29
Debt/FCF 19.81
Debt/EBITDA 3.76
Cap/Depr 191.26%
Cap/Sales 24.01%
Interest Coverage 250
Cash Conversion 192.23%
Profit Quality 55.57%
Current Ratio 1.04
Quick Ratio 1.04
Altman-Z 6.26
F-Score6
WACC11.18%
ROIC/WACC0.08
Cap/Depr(3y)105.19%
Cap/Depr(5y)113.3%
Cap/Sales(3y)12.48%
Cap/Sales(5y)11.58%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)73.53%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%60%
EPS Next Y56.79%
EPS Next 2Y34.63%
EPS Next 3Y33.14%
EPS Next 5YN/A
Revenue 1Y (TTM)17.25%
Revenue growth 3Y15.17%
Revenue growth 5Y16.01%
Sales Q2Q%17.52%
Revenue Next Year17.97%
Revenue Next 2Y16.3%
Revenue Next 3Y15.77%
Revenue Next 5Y12.03%
EBIT growth 1Y145.57%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year82.77%
EBIT Next 3Y40.16%
EBIT Next 5YN/A
FCF growth 1Y190.29%
FCF growth 3Y-38.89%
FCF growth 5Y-33.57%
OCF growth 1Y172.37%
OCF growth 3Y7.68%
OCF growth 5Y-1.57%