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VERTEX INC - CLASS A (VERX) Stock Fundamental Analysis

NASDAQ:VERX - Nasdaq - US92538J1060 - Common Stock - Currency: USD

44.21  -1.23 (-2.71%)

After market: 44.21 0 (0%)

Fundamental Rating

4

Taking everything into account, VERX scores 4 out of 10 in our fundamental rating. VERX was compared to 283 industry peers in the Software industry. There are concerns on the financial health of VERX while its profitability can be described as average. VERX is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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5

1. Profitability

1.1 Basic Checks

In the past year VERX was profitable.
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

The Return On Assets of VERX (2.55%) is better than 68.48% of its industry peers.
VERX has a Return On Equity of 11.74%. This is amongst the best in the industry. VERX outperforms 80.80% 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 64.49% 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 68.48% of its industry peers.
VERX has a better Operating Margin (1.30%) than 64.49% of its industry peers.
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.
The number of shares outstanding for VERX has been increased compared to 1 year ago.
Compared to 5 years ago, VERX has more shares outstanding
VERX has a better debt/assets ratio than last year.
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 5.04. This indicates that VERX is financially healthy and has little risk of bankruptcy at the moment.
VERX has a Altman-Z score of 5.04. This is in the better half of the industry: VERX outperforms 65.22% of its industry peers.
The Debt to FCF ratio of VERX is 19.81, which is on the high side as it means it would take VERX, 19.81 years of fcf income to pay off 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 45.29% 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 has a worse Debt to Equity ratio (1.29) than 79.71% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.29
Debt/FCF 19.81
Altman-Z 5.04
ROIC/WACC0.06
WACC13.98%
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

A Current Ratio of 1.04 indicates that VERX should not have too much problems paying its short term obligations.
VERX has a worse Current ratio (1.04) than 75.00% of its industry peers.
A Quick Ratio of 1.04 indicates that VERX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.04, VERX is not doing good in the industry: 74.64% of the companies in the same industry are doing better.
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

The Earnings Per Share has grown by an impressive 73.53% over the past year.
The Revenue has grown by 17.25% in the past year. This is quite good.
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 33.29% on average over the next years. This is a very strong growth
VERX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.03% yearly.
EPS Next Y56.81%
EPS Next 2Y34.77%
EPS Next 3Y33.29%
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

VERX is valuated quite expensively with a Price/Earnings ratio of 74.93.
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 29.62.
With a Price/Forward Earnings ratio of 62.42, VERX can be considered very expensive at the moment.
VERX's Price/Forward Earnings is on the same level as the industry average.
VERX's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.70.
Industry RankSector Rank
PE 74.93
Fwd PE 62.42
VERX Price Earnings VS Forward Price EarningsVERX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

VERX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. VERX is cheaper than 61.96% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as VERX.
Industry RankSector Rank
P/FCF 408.11
EV/EBITDA 77.82
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

The 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 33.29% in the coming years.
PEG (NY)1.32
PEG (5Y)N/A
EPS Next 2Y34.77%
EPS Next 3Y33.29%

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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 (2/21/2025, 8:00:01 PM)

After market: 44.21 0 (0%)

44.21

-1.23 (-2.71%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-06 2024-11-06/bmo
Earnings (Next)02-27 2025-02-27/bmo
Inst Owners113.34%
Inst Owner Change-85.87%
Ins Owners4.91%
Ins Owner Change-28.95%
Market Cap6.89B
Analysts82.11
Price Target59.42 (34.4%)
Short Float %9.2%
Short Ratio5.85
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)2.85%
PT rev (3m)5.56%
EPS NQ rev (1m)7.13%
EPS NQ rev (3m)7.13%
EPS NY rev (1m)0.01%
EPS NY rev (3m)3.83%
Revenue NQ rev (1m)0.48%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.4%
Valuation
Industry RankSector Rank
PE 74.93
Fwd PE 62.42
P/S 10.72
P/FCF 408.11
P/OCF 40.25
P/B 26.62
P/tB N/A
EV/EBITDA 77.82
EPS(TTM)0.59
EY1.33%
EPS(NY)0.71
Fwd EY1.6%
FCF(TTM)0.11
FCFY0.25%
OCF(TTM)1.1
OCFY2.48%
SpS4.12
BVpS1.66
TBVpS-1.07
PEG (NY)1.32
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 5.04
F-Score6
WACC13.98%
ROIC/WACC0.06
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 Y56.81%
EPS Next 2Y34.77%
EPS Next 3Y33.29%
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%