VERTEX INC - CLASS A (VERX)
US92538J1060 - Common Stock
We assign a fundamental rating of 4 out of 10 to VERX. VERX was compared to 279 industry peers in the Software industry. There are concerns on the financial health of VERX while its profitability can be described as average. While showing a medium growth rate, VERX is valued expensive at the moment.
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.
In the past 5 years VERX reported 4 times negative net income.
VERX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 2.55%, VERX is doing good in the industry, outperforming 69.18% of the companies in the same industry.
With an excellent Return On Equity value of 11.74%, VERX belongs to the best of the industry, outperforming 82.80% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 0.90%, VERX is in the better half of the industry, outperforming 64.52% of the companies in the same industry.
| Industry Rank | Sector 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
1.3 Margins
VERX's Profit Margin of 4.73% is fine compared to the rest of the industry. VERX outperforms 69.89% of its industry peers.
The Operating Margin of VERX (1.30%) is better than 65.23% of its industry peers.
VERX has a Gross Margin (62.59%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of VERX has remained more or less at the same level.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
VERX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, VERX has more shares outstanding
VERX has more shares outstanding than it did 5 years ago.
VERX has a better debt/assets ratio than last year.
2.2 Solvency
VERX has an Altman-Z score of 5.85. This indicates that VERX is financially healthy and has little risk of bankruptcy at the moment.
VERX's Altman-Z score of 5.85 is fine compared to the rest of the industry. VERX outperforms 66.31% 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 has a Debt to FCF ratio of 19.81. This is comparable to the rest of the industry: VERX outperforms 46.95% of its industry peers.
A Debt/Equity ratio of 1.29 is on the high side and indicates that VERX has dependencies on debt financing.
VERX has a worse Debt to Equity ratio (1.29) than 80.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | 19.81 | ||
| Altman-Z | 5.85 |
ROIC/WACC0.08
WACC11.86%
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.
The Current ratio of VERX (1.04) is worse than 75.27% of its industry peers.
A Quick Ratio of 1.04 indicates that VERX should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.04, VERX is doing worse than 74.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 1.04 |
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.
The Revenue has grown by 17.25% in the past year. This is quite good.
The Revenue has been growing by 16.01% on average over the past years. This is quite good.
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
VERX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 33.98% yearly.
The Revenue is expected to grow by 12.03% on average over the next years. This is quite good.
EPS Next Y51.03%
EPS Next 2Y33.56%
EPS Next 3Y33.98%
EPS Next 5YN/A
Revenue Next Year17.5%
Revenue Next 2Y16.01%
Revenue Next 3Y15.86%
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 88.66, which means the current valuation is very expensive for VERX.
VERX's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 28.65. VERX is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 75.19, which means the current valuation is very expensive for VERX.
VERX's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.56, VERX is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.66 | ||
| Fwd PE | 75.19 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VERX is valued a bit cheaper than the industry average as 60.22% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as VERX.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 482.88 | ||
| EV/EBITDA | 92 |
4.3 Compensation for Growth
VERX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
VERX's earnings are expected to grow with 33.98% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.74
PEG (5Y)N/A
EPS Next 2Y33.56%
EPS Next 3Y33.98%
5. Dividend
5.1 Amount
No dividends for VERX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
VERTEX INC - CLASS A
NASDAQ:VERX (11/20/2024, 8:00:02 PM)
After market: 52.31 0 (0%)52.31
+1.11 (+2.17%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap8.16B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Div Incr Years
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Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.66 | ||
| Fwd PE | 75.19 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.74
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.55% | ||
| ROE | 11.74% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.3% | ||
| PM (TTM) | 4.73% | ||
| GM | 62.59% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.29 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.04 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)73.53%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y51.03%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.25%
Revenue growth 3Y15.17%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y