VERTEX PHARMACEUTICALS INC (VRTX) Stock Fundamental Analysis
NASDAQ:VRTX - Nasdaq - US92532F1003 - Common Stock - Currency: USD
VRTX gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 571 industry peers in the Biotechnology industry. VRTX scores excellent on profitability, but there are some minor concerns on its financial health. VRTX is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year VRTX was profitable.
VRTX had a negative operating cash flow in the past year.
VRTX had positive earnings in 4 of the past 5 years.
Of the past 5 years VRTX 4 years had a positive operating cash flow.
1.2 Ratios
VRTX's Return On Assets of -2.38% is amongst the best of the industry. VRTX outperforms 90.76% of its industry peers.
Looking at the Return On Equity, with a value of -3.26%, VRTX belongs to the top of the industry, outperforming 92.18% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 18.31%, VRTX belongs to the top of the industry, outperforming 97.69% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for VRTX is significantly above the industry average of 14.04%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.38% | ||
| ROE | -3.26% | ||
| ROIC | 18.31% |
ROA(3y)10.62%
ROA(5y)14.47%
ROE(3y)13.73%
ROE(5y)19.12%
ROIC(3y)19.47%
ROIC(5y)20.15%
1.3 Margins
VRTX's Operating Margin of 39.89% is amongst the best of the industry. VRTX outperforms 99.47% of its industry peers.
VRTX's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 86.11%, VRTX belongs to the top of the industry, outperforming 89.17% of the companies in the same industry.
In the last couple of years the Gross Margin of VRTX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 39.89% | ||
| PM (TTM) | N/A | ||
| GM | 86.11% |
OM growth 3Y2.79%
OM growth 5Y6.75%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.74%
GM growth 5Y-0.17%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so VRTX is creating value.
Compared to 1 year ago, VRTX has less shares outstanding
VRTX has less shares outstanding than it did 5 years ago.
VRTX has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 14.14 indicates that VRTX is not in any danger for bankruptcy at the moment.
VRTX's Altman-Z score of 14.14 is amongst the best of the industry. VRTX outperforms 89.88% of its industry peers.
VRTX has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of VRTX (0.01) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 14.14 |
ROIC/WACC1.94
WACC9.45%
2.3 Liquidity
VRTX has a Current Ratio of 2.69. This indicates that VRTX is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of VRTX (2.69) is worse than 69.98% of its industry peers.
VRTX has a Quick Ratio of 2.35. This indicates that VRTX is financially healthy and has no problem in meeting its short term obligations.
With a Quick ratio value of 2.35, VRTX is not doing good in the industry: 71.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.69 | ||
| Quick Ratio | 2.35 |
3. Growth
3.1 Past
The earnings per share for VRTX have decreased strongly by -98.09% in the last year.
Measured over the past years, VRTX shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -44.14% on average per year.
The Revenue has grown by 11.66% in the past year. This is quite good.
Measured over the past years, VRTX shows a very strong growth in Revenue. The Revenue has been growing by 21.50% on average per year.
EPS 1Y (TTM)-98.09%
EPS 3Y-71.86%
EPS 5Y-44.14%
EPS Q2Q%-5.24%
Revenue 1Y (TTM)11.66%
Revenue growth 3Y13.31%
Revenue growth 5Y21.5%
Sales Q2Q%15.66%
3.2 Future
Based on estimates for the next years, VRTX will show a very strong growth in Earnings Per Share. The EPS will grow by 151.00% on average per year.
The Revenue is expected to grow by 9.03% on average over the next years. This is quite good.
EPS Next Y6260.03%
EPS Next 2Y739.5%
EPS Next 3Y329.95%
EPS Next 5Y151%
Revenue Next Year9.77%
Revenue Next 2Y9.34%
Revenue Next 3Y9.25%
Revenue Next 5Y9.03%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
VRTX is valuated quite expensively with a Price/Earnings ratio of 1669.79.
Based on the Price/Earnings ratio, VRTX is valued cheaper than 92.01% of the companies in the same industry.
VRTX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 29.63.
Based on the Price/Forward Earnings ratio of 26.25, the valuation of VRTX can be described as expensive.
Based on the Price/Forward Earnings ratio, VRTX is valued cheaply inside the industry as 93.43% of the companies are valued more expensively.
VRTX is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1669.79 | ||
| Fwd PE | 26.25 |
4.2 Price Multiples
95.38% of the companies in the same industry are more expensive than VRTX, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 24.83 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of VRTX may justify a higher PE ratio.
A more expensive valuation may be justified as VRTX's earnings are expected to grow with 329.94% in the coming years.
PEG (NY)0.27
PEG (5Y)N/A
EPS Next 2Y739.5%
EPS Next 3Y329.95%
5. Dividend
5.1 Amount
No dividends for VRTX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
484.24
+3.91 (+0.81%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryBiotechnology
Earnings (Last)
Earnings (Next)
Inst Owners96.16%
Inst Owner Change0.27%
Ins Owners0.15%
Ins Owner Change13.72%
Market Cap124.40B
Analysts77
Price Target512.92 (5.92%)
Short Float %1.78%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.31%
Min EPS beat(2)-3.07%
Max EPS beat(2)3.69%
EPS beat(4)2
Avg EPS beat(4)-128.02%
Min EPS beat(4)-527.57%
Max EPS beat(4)14.85%
EPS beat(8)4
Avg EPS beat(8)-64.13%
EPS beat(12)7
Avg EPS beat(12)-41.66%
EPS beat(16)11
Avg EPS beat(16)-28.52%
Revenue beat(2)1
Avg Revenue beat(2)1.23%
Min Revenue beat(2)-0.22%
Max Revenue beat(2)2.68%
Revenue beat(4)2
Avg Revenue beat(4)0.55%
Min Revenue beat(4)-2.56%
Max Revenue beat(4)2.68%
Revenue beat(8)3
Avg Revenue beat(8)-0.2%
Revenue beat(12)5
Avg Revenue beat(12)-0.06%
Revenue beat(16)9
Avg Revenue beat(16)0.62%
PT rev (1m)-2.39%
PT rev (3m)-3.7%
EPS NQ rev (1m)-1.63%
EPS NQ rev (3m)-1.91%
EPS NY rev (1m)-3.9%
EPS NY rev (3m)3.78%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-0.11%
Revenue NY rev (1m)0.37%
Revenue NY rev (3m)0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1669.79 | ||
| Fwd PE | 26.25 | ||
| P/S | 11.29 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 7.58 | ||
| P/tB | 8.58 | ||
| EV/EBITDA | 24.83 |
EPS(TTM)0.29
EY0.06%
EPS(NY)18.44
Fwd EY3.81%
FCF(TTM)-3.81
FCFYN/A
OCF(TTM)-1.92
OCFYN/A
SpS42.9
BVpS63.88
TBVpS56.43
PEG (NY)0.27
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.38% | ||
| ROE | -3.26% | ||
| ROCE | 23.17% | ||
| ROIC | 18.31% | ||
| ROICexc | 30.71% | ||
| ROICexgc | 36.97% | ||
| OM | 39.89% | ||
| PM (TTM) | N/A | ||
| GM | 86.11% | ||
| FCFM | N/A |
ROA(3y)10.62%
ROA(5y)14.47%
ROE(3y)13.73%
ROE(5y)19.12%
ROIC(3y)19.47%
ROIC(5y)20.15%
ROICexc(3y)50.94%
ROICexc(5y)56.27%
ROICexgc(3y)73.51%
ROICexgc(5y)87.59%
ROCE(3y)24.64%
ROCE(5y)25.5%
ROICexcg growth 3Y-26.3%
ROICexcg growth 5Y-6.95%
ROICexc growth 3Y-19.26%
ROICexc growth 5Y0.61%
OM growth 3Y2.79%
OM growth 5Y6.75%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.74%
GM growth 5Y-0.17%
F-Score4
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 0.02 | ||
| Cap/Depr | 234.27% | ||
| Cap/Sales | 4.4% | ||
| Interest Coverage | 144.12 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.69 | ||
| Quick Ratio | 2.35 | ||
| Altman-Z | 14.14 |
F-Score4
WACC9.45%
ROIC/WACC1.94
Cap/Depr(3y)171.61%
Cap/Depr(5y)187.84%
Cap/Sales(3y)3.11%
Cap/Sales(5y)3.32%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-98.09%
EPS 3Y-71.86%
EPS 5Y-44.14%
EPS Q2Q%-5.24%
EPS Next Y6260.03%
EPS Next 2Y739.5%
EPS Next 3Y329.95%
EPS Next 5Y151%
Revenue 1Y (TTM)11.66%
Revenue growth 3Y13.31%
Revenue growth 5Y21.5%
Sales Q2Q%15.66%
Revenue Next Year9.77%
Revenue Next 2Y9.34%
Revenue Next 3Y9.25%
Revenue Next 5Y9.03%
EBIT growth 1Y14.17%
EBIT growth 3Y16.47%
EBIT growth 5Y29.7%
EBIT Next Year867.56%
EBIT Next 3Y128.8%
EBIT Next 5Y71.26%
FCF growth 1Y-129.83%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-113.93%
OCF growth 3YN/A
OCF growth 5YN/A