VERTEX PHARMACEUTICALS INC (VRTX) Stock Fundamental Analysis
NASDAQ:VRTX - Nasdaq - US92532F1003 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to VRTX. VRTX was compared to 568 industry peers in the Biotechnology industry. VRTX has an excellent profitability rating, but there are some minor concerns on its financial health. VRTX has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year VRTX was profitable.
In the past year VRTX has reported a negative cash flow from operations.
VRTX had positive earnings in 4 of the past 5 years.
VRTX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of VRTX (-2.38%) is better than 89.61% 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 90.85% 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 97.71% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for VRTX is significantly above the industry average of 14.25%.
| 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
With an excellent Operating Margin value of 39.89%, VRTX belongs to the best 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.
Looking at the Gross Margin, with a value of 86.11%, VRTX belongs to the top of the industry, outperforming 88.20% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), VRTX is creating value.
VRTX has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, VRTX has less shares outstanding
Compared to 1 year ago, VRTX has an improved debt to assets ratio.
2.2 Solvency
VRTX has an Altman-Z score of 14.37. This indicates that VRTX is financially healthy and has little risk of bankruptcy at the moment.
VRTX has a better Altman-Z score (14.37) than 92.96% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that VRTX is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.01, VRTX is in line with its industry, outperforming 43.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 14.37 |
ROIC/WACC1.77
WACC10.33%
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.
With a Current ratio value of 2.69, VRTX is not doing good in the industry: 68.49% of the companies in the same industry are doing better.
A Quick Ratio of 2.35 indicates that VRTX has no problem at all paying its short term obligations.
VRTX has a Quick ratio of 2.35. This is in the lower half of the industry: VRTX underperforms 70.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.69 | ||
| Quick Ratio | 2.35 |
3. Growth
3.1 Past
VRTX shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -98.09%.
VRTX shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -44.14% yearly.
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
The Earnings Per Share is expected to grow by 151.08% on average over the next years. This is a very strong growth
VRTX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.42% yearly.
EPS Next Y6259.25%
EPS Next 2Y742.26%
EPS Next 3Y329.61%
EPS Next 5Y151.08%
Revenue Next Year9.84%
Revenue Next 2Y9.65%
Revenue Next 3Y9.31%
Revenue Next 5Y10.42%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
VRTX is valuated quite expensively with a Price/Earnings ratio of 1686.55.
91.02% of the companies in the same industry are more expensive than VRTX, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.29, VRTX is valued quite expensively.
The Price/Forward Earnings ratio is 26.52, which means the current valuation is very expensive for VRTX.
VRTX's Price/Forward Earnings ratio is rather cheap when compared to the industry. VRTX is cheaper than 93.13% of the companies in the same industry.
VRTX's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1686.55 | ||
| Fwd PE | 26.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VRTX is valued cheaper than 94.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 25.34 |
4.3 Compensation for Growth
VRTX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
VRTX has a very decent profitability rating, which may justify a higher PE ratio.
VRTX's earnings are expected to grow with 329.61% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.27
PEG (5Y)N/A
EPS Next 2Y742.26%
EPS Next 3Y329.61%
5. Dividend
5.1 Amount
No dividends for VRTX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
489.1
+3.21 (+0.66%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryBiotechnology
Earnings (Last)
Earnings (Next)
Inst Owners96.16%
Inst Owner Change0%
Ins Owners0.15%
Ins Owner Change5.15%
Market Cap125.74B
Analysts77
Price Target512.28 (4.74%)
Short Float %2.14%
Short Ratio3.7
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)0.07%
PT rev (3m)-0.73%
EPS NQ rev (1m)0.5%
EPS NQ rev (3m)-2.48%
EPS NY rev (1m)0.34%
EPS NY rev (3m)-3.91%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)2%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)1.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1686.55 | ||
| Fwd PE | 26.52 | ||
| P/S | 11.41 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 7.66 | ||
| P/tB | 8.67 | ||
| EV/EBITDA | 25.34 |
EPS(TTM)0.29
EY0.06%
EPS(NY)18.44
Fwd EY3.77%
FCF(TTM)-3.8
FCFYN/A
OCF(TTM)-1.92
OCFYN/A
SpS42.87
BVpS63.83
TBVpS56.39
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 | 14.37 |
F-Score4
WACC10.33%
ROIC/WACC1.77
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 Y6259.25%
EPS Next 2Y742.26%
EPS Next 3Y329.61%
EPS Next 5Y151.08%
Revenue 1Y (TTM)11.66%
Revenue growth 3Y13.31%
Revenue growth 5Y21.5%
Sales Q2Q%15.66%
Revenue Next Year9.84%
Revenue Next 2Y9.65%
Revenue Next 3Y9.31%
Revenue Next 5Y10.42%
EBIT growth 1Y14.17%
EBIT growth 3Y16.47%
EBIT growth 5Y29.7%
EBIT Next Year832.87%
EBIT Next 3Y131.69%
EBIT Next 5Y70.46%
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