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VERTEX PHARMACEUTICALS INC (VRTX) Stock Fundamental Analysis

NASDAQ:VRTX - Nasdaq - US92532F1003 - Common Stock

428  +0.11 (+0.03%)

After market: 429.57 +1.57 (+0.37%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to VRTX. VRTX was compared to 572 industry peers in the Biotechnology industry. VRTX scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, VRTX is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year VRTX was profitable.
VRTX had a negative operating cash flow in the past year.
In the past 5 years VRTX has always been profitable.
VRTX had a positive operating cash flow in each of the past 5 years.
VRTX Yearly Net Income VS EBIT VS OCF VS FCFVRTX Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B 2B 3B 4B

1.2 Ratios

VRTX has a Return On Assets of -2.16%. This is amongst the best in the industry. VRTX outperforms 90.97% of its industry peers.
VRTX has a Return On Equity of -3.07%. This is amongst the best in the industry. VRTX outperforms 92.21% of its industry peers.
With an excellent Return On Invested Capital value of 18.91%, VRTX belongs to the best of the industry, outperforming 97.88% of the companies in the same industry.
VRTX had an Average Return On Invested Capital over the past 3 years of 20.25%. This is significantly above the industry average of 13.83%.
Industry RankSector Rank
ROA -2.16%
ROE -3.07%
ROIC 18.91%
ROA(3y)17.22%
ROA(5y)17.78%
ROE(3y)22.55%
ROE(5y)23.64%
ROIC(3y)20.25%
ROIC(5y)19.57%
VRTX Yearly ROA, ROE, ROICVRTX Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 40 -40

1.3 Margins

VRTX's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 40.36%, VRTX belongs to the top of the industry, outperforming 99.47% of the companies in the same industry.
VRTX's Operating Margin has improved in the last couple of years.
VRTX has a Gross Margin of 86.12%. This is amongst the best in the industry. VRTX outperforms 89.20% of its industry peers.
In the last couple of years the Gross Margin of VRTX has remained more or less at the same level.
Industry RankSector Rank
OM 40.36%
PM (TTM) N/A
GM 86.12%
OM growth 3Y-1.36%
OM growth 5Y15.18%
PM growth 3Y-5.67%
PM growth 5Y-11.82%
GM growth 3Y-0.35%
GM growth 5Y0.15%
VRTX Yearly Profit, Operating, Gross MarginsVRTX Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50 -50

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5

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), VRTX is creating value.
Compared to 1 year ago, VRTX has more shares outstanding
VRTX has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, VRTX has an improved debt to assets ratio.
VRTX Yearly Shares OutstandingVRTX Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
VRTX Yearly Total Debt VS Total AssetsVRTX Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B 20B

2.2 Solvency

VRTX has an Altman-Z score of 11.98. This indicates that VRTX is financially healthy and has little risk of bankruptcy at the moment.
VRTX has a Altman-Z score of 11.98. This is amongst the best in the industry. VRTX outperforms 87.43% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that VRTX is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.01, VRTX perfoms like the industry average, outperforming 43.54% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF N/A
Altman-Z 11.98
ROIC/WACC1.71
WACC11.08%
VRTX Yearly LT Debt VS Equity VS FCFVRTX Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5B 10B 15B

2.3 Liquidity

VRTX has a Current Ratio of 2.47. This indicates that VRTX is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.47, VRTX is doing worse than 71.86% of the companies in the same industry.
A Quick Ratio of 2.20 indicates that VRTX has no problem at all paying its short term obligations.
With a Quick ratio value of 2.20, VRTX is not doing good in the industry: 72.74% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 2.47
Quick Ratio 2.2
VRTX Yearly Current Assets VS Current LiabilitesVRTX Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B

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6

3. Growth

3.1 Past

VRTX shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -96.55%.
The Earnings Per Share has been growing by 30.06% on average over the past years. This is a very strong growth
VRTX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.06%.
Measured over the past years, VRTX shows a very strong growth in Revenue. The Revenue has been growing by 26.49% on average per year.
EPS 1Y (TTM)-96.55%
EPS 3Y13.83%
EPS 5Y30.06%
EPS Q2Q%7.35%
Revenue 1Y (TTM)10.06%
Revenue growth 3Y16.73%
Revenue growth 5Y26.49%
Sales Q2Q%11.61%

3.2 Future

Based on estimates for the next years, VRTX will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.89% on average per year.
The Revenue is expected to grow by 9.45% on average over the next years. This is quite good.
EPS Next Y-96.09%
EPS Next 2Y12.29%
EPS Next 3Y11.05%
EPS Next 5Y11.89%
Revenue Next Year10.43%
Revenue Next 2Y9.38%
Revenue Next 3Y9.53%
Revenue Next 5Y9.45%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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.
VRTX Yearly Revenue VS EstimatesVRTX Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 5B 10B 15B 20B
VRTX Yearly EPS VS EstimatesVRTX Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 0 10 20 30

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3

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 839.22, the valuation of VRTX can be described as expensive.
Based on the Price/Earnings ratio, VRTX is valued cheaper than 92.21% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.19. VRTX is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 22.30, the valuation of VRTX can be described as rather expensive.
Based on the Price/Forward Earnings ratio, VRTX is valued cheaply inside the industry as 93.98% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of VRTX to the average of the S&P500 Index (24.37), we can say VRTX is valued inline with the index average.
Industry RankSector Rank
PE 839.22
Fwd PE 22.3
VRTX Price Earnings VS Forward Price EarningsVRTX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 200 400 600 800

4.2 Price Multiples

VRTX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. VRTX is cheaper than 95.04% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 22.45
VRTX Per share dataVRTX EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60

4.3 Compensation for Growth

The decent profitability rating of VRTX may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)27.92
EPS Next 2Y12.29%
EPS Next 3Y11.05%

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0

5. Dividend

5.1 Amount

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

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VERTEX PHARMACEUTICALS INC

NASDAQ:VRTX (1/22/2025, 8:00:02 PM)

After market: 429.57 +1.57 (+0.37%)

428

+0.11 (+0.03%)

Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryBiotechnology
Earnings (Last)11-04 2024-11-04/amc
Earnings (Next)02-11 2025-02-11/amc
Inst Owners95.47%
Inst Owner Change0.04%
Ins Owners0.09%
Ins Owner Change-4.5%
Market Cap110.22B
Analysts77
Price Target516.02 (20.57%)
Short Float %1.54%
Short Ratio2.46
Dividend
Industry RankSector 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)-261.94%
Min EPS beat(2)-527.57%
Max EPS beat(2)3.69%
EPS beat(4)3
Avg EPS beat(4)-127.17%
Min EPS beat(4)-527.57%
Max EPS beat(4)14.85%
EPS beat(8)5
Avg EPS beat(8)-63.13%
EPS beat(12)8
Avg EPS beat(12)-41.4%
EPS beat(16)11
Avg EPS beat(16)-28.64%
Revenue beat(2)0
Avg Revenue beat(2)-1.39%
Min Revenue beat(2)-2.56%
Max Revenue beat(2)-0.22%
Revenue beat(4)1
Avg Revenue beat(4)-0.57%
Min Revenue beat(4)-2.56%
Max Revenue beat(4)2.3%
Revenue beat(8)2
Avg Revenue beat(8)-0.77%
Revenue beat(12)5
Avg Revenue beat(12)-0.16%
Revenue beat(16)9
Avg Revenue beat(16)0.5%
PT rev (1m)-2.47%
PT rev (3m)-1.57%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.21%
EPS NY rev (1m)0%
EPS NY rev (3m)81.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.83%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.27%
Valuation
Industry RankSector Rank
PE 839.22
Fwd PE 22.3
P/S 10.37
P/FCF N/A
P/OCF N/A
P/B 7.05
P/tB 8.04
EV/EBITDA 22.45
EPS(TTM)0.51
EY0.12%
EPS(NY)19.19
Fwd EY4.48%
FCF(TTM)-5.25
FCFYN/A
OCF(TTM)-3.27
OCFYN/A
SpS41.26
BVpS60.7
TBVpS53.24
PEG (NY)N/A
PEG (5Y)27.92
Profitability
Industry RankSector Rank
ROA -2.16%
ROE -3.07%
ROCE 23.48%
ROIC 18.91%
ROICexc 33.04%
ROICexgc 40.47%
OM 40.36%
PM (TTM) N/A
GM 86.12%
FCFM N/A
ROA(3y)17.22%
ROA(5y)17.78%
ROE(3y)22.55%
ROE(5y)23.64%
ROIC(3y)20.25%
ROIC(5y)19.57%
ROICexc(3y)61.35%
ROICexc(5y)57.2%
ROICexgc(3y)93.66%
ROICexgc(5y)92.47%
ROCE(3y)25.13%
ROCE(5y)24.3%
ROICexcg growth 3Y-18.9%
ROICexcg growth 5Y19.28%
ROICexc growth 3Y-11.65%
ROICexc growth 5Y12.56%
OM growth 3Y-1.36%
OM growth 5Y15.18%
PM growth 3Y-5.67%
PM growth 5Y-11.82%
GM growth 3Y-0.35%
GM growth 5Y0.15%
F-Score3
Asset Turnover0.48
Health
Industry RankSector Rank
Debt/Equity 0.01
Debt/FCF N/A
Debt/EBITDA 0.03
Cap/Depr 231.63%
Cap/Sales 4.79%
Interest Coverage 111.97
Cash Conversion N/A
Profit Quality N/A
Current Ratio 2.47
Quick Ratio 2.2
Altman-Z 11.98
F-Score3
WACC11.08%
ROIC/WACC1.71
Cap/Depr(3y)155.89%
Cap/Depr(5y)155.11%
Cap/Sales(3y)2.67%
Cap/Sales(5y)2.8%
Profit Quality(3y)103.86%
Profit Quality(5y)109.78%
High Growth Momentum
Growth
EPS 1Y (TTM)-96.55%
EPS 3Y13.83%
EPS 5Y30.06%
EPS Q2Q%7.35%
EPS Next Y-96.09%
EPS Next 2Y12.29%
EPS Next 3Y11.05%
EPS Next 5Y11.89%
Revenue 1Y (TTM)10.06%
Revenue growth 3Y16.73%
Revenue growth 5Y26.49%
Sales Q2Q%11.61%
Revenue Next Year10.43%
Revenue Next 2Y9.38%
Revenue Next 3Y9.53%
Revenue Next 5Y9.45%
EBIT growth 1Y10.61%
EBIT growth 3Y15.13%
EBIT growth 5Y45.7%
EBIT Next Year-71.38%
EBIT Next 3Y13.87%
EBIT Next 5Y12.96%
FCF growth 1Y-135.44%
FCF growth 3Y3.08%
FCF growth 5Y22.79%
OCF growth 1Y-120.82%
OCF growth 3Y2.83%
OCF growth 5Y22.73%