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Vertex
(NASDAQ:VERX)
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Rating:66Neutral
Price Target:
$14.50
▲(22.16% Upside)
Action:Reiterated
Date:08/04/26
The score is driven primarily by improving fundamentals (strong operating cash flow, solid free cash flow, and sharply reduced leverage) and a constructive earnings call with raised full-year adjusted EBITDA guidance and evidence of margin leverage. These positives are tempered by weak profitability quality in the financial statements (thin net margin, negative operating margin and lower TTM EBITDA margin), mixed long-term technical trend (still below the 200-DMA), and limited valuation support given the negative P/E and no dividend yield provided.
Positive Factors
Balance-sheet de-risking
Leverage has been materially reduced (debt roughly $11M, debt/equity ~0.05) and equity sits high versus assets. This durable balance-sheet repair lowers refinancing and solvency risk, increases capacity for buybacks and M&A, and provides runway to fund margin improvement initiatives.
Negative Factors
Thin profitability
Despite revenue growth, reported margins remain thin: net margin near breakeven and TTM EBITDA margin compressed to ~4% from prior mid-teens. Until operating costs sustainably recede or revenue mix shifts, earnings power is fragile and small shocks could revert profits to losses.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet de-risking
Leverage has been materially reduced (debt roughly $11M, debt/equity ~0.05) and equity sits high versus assets. This durable balance-sheet repair lowers refinancing and solvency risk, increases capacity for buybacks and M&A, and provides runway to fund margin improvement initiatives.
Read all positive factors
Vertex Key Performance Indicators (KPIs)
Any
Gross Profit by Segment
Shows profitability across different segments, revealing which areas contribute most to the company's bottom line.
Shows profitability across different segments, revealing which areas contribute most to the company's bottom line.
Data provided by:
The Fly
The FlyVertex (VERX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.09B
Dividend YieldN/A
Average Volume (3M)1.80M
Price to Earnings (P/E)―
Beta (1Y)1.12
Revenue Growth11.79%
EPS Growth85.70%
CountryUS
Employees2,100
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.01
Shares Outstanding79,661,290
10 Day Avg. Volume1,968,080
30 Day Avg. Volume1,800,150
Financial Highlights & Ratios
PEG Ratio-3.48
Price to Book (P/B)11.12
Price to Sales (P/S)3.85
P/FCF Ratio41.56
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$16.33Price Target Upside37.60% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)0.8
Revenue Forecast (FY)$827.21M
Vertex Business Overview & Revenue Model
Company Description
Vertex, Inc. specializes in delivering advanced tax technology solutions to corporations across various sectors, including retail, communication, leasing, and manufacturing. These services are provided to clients both within the United States and ...
How the Company Makes Money
Vertex primarily makes money by selling subscriptions to its cloud-based tax software (SaaS). These subscription fees are typically tied to the use of its tax calculation and compliance products and are commonly structured around factors such as t...
Vertex Earnings Call Summary
Earnings Call Date:Aug 03, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call highlighted durable core business performance, robust margin and earnings leverage, clear progress on AI-driven productivity and strong early momentum in e-invoicing and strategic customer wins. Offsetting risks include slower cloud conversions and elongated sales cycles that constrained near-term expansion and cloud revenue timing, plus FCF affected by restructuring costs and AI commercial revenue not yet material. On balance the positives — solid revenue growth, strong adjusted EBITDA improvement, stable retention metrics, AI operational gains and stronger leadership — outweigh the challenges, while management provided realistic guidance and raised full‑year EBITDA.Positive Updates
Revenue Growth at High End of Guidance
Total revenue $204.0M, up 10.5% YoY and at the high end of quarterly guidance; subscription revenue +10.7% YoY and services revenue +9.4% YoY.
Negative Updates
Slower-than-Expected Cloud Conversions
Cloud conversion timing has been slower than anticipated, reducing near-term cloud revenue conversion and prompting a downward reassessment of cloud conversion cadence (company calls this a timing/left-pocket-to-right-pocket conversion issue).
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth at High End of Guidance
Total revenue $204.0M, up 10.5% YoY and at the high end of quarterly guidance; subscription revenue +10.7% YoY and services revenue +9.4% YoY.
Read all positive updates
Company Guidance
Vertex guided Q3 revenue of $208–211M and Q3 adjusted EBITDA of $55–57M; for full‑year 2026 it narrowed revenue to $825–830M and raised full‑year adjusted EBITDA to $206–210M (from $202–208M) and now expects Cloud revenue growth of 18% for the year. Management said Q2 value‑creation actions are driving earnings leverage — Q2 revenue was $204M (+10.5% YoY) with adjusted EBITDA $51M (25% margin) and ARR +10.5% — and reported pro‑forma Q2 free cash flow of $13.2M (6.5% margin) with a pro‑forma FCF/adj‑EBITDA conversion of 26%. Longer‑term targets include progressing to a high‑20s adjusted‑EBITDA margin by end‑2027 and ~70% FCF/adj‑EBITDA conversion by Q4‑2027. Additional Q2 metrics cited: Cloud growth +17.9% (YTD 19.3%), gross revenue retention 95%, net revenue retention 105%, average ARR per direct customer $142,997 (+9.2%), scaled customer growth 8%, and $26.5M of buybacks in Q2 (total repurchased $56.6M; $93.4M remaining).Vertex Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
76
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 787.44M | 748.44M | 666.78M | 572.39M | 491.62M | 425.55M |
| Gross Profit | 496.62M | 454.51M | 426.13M | 348.58M | 298.49M | 263.66M |
| EBITDA | 31.43M | 104.51M | 102.01M | 56.95M | 53.07M | 41.84M |
| Net Income | 3.58M | 7.21M | -52.73M | -13.09M | -12.30M | -1.48M |
Balance Sheet | ||||||
| Total Assets | 1.21B | 1.27B | 1.17B | 759.93M | 719.19M | 670.21M |
| Cash, Cash Equivalents and Short-Term Investments | 230.49M | 314.01M | 305.21M | 77.72M | 102.98M | 73.33M |
| Total Debt | 11.32M | 359.62M | 351.89M | 66.97M | 73.52M | 28.61M |
| Total Liabilities | 969.04M | 1.01B | 987.44M | 506.95M | 489.47M | 440.12M |
| Stockholders Equity | 241.11M | 258.92M | 179.35M | 252.98M | 229.72M | 230.08M |
Cash Flow | ||||||
| Free Cash Flow | 76.77M | 69.31M | 99.05M | 6.10M | 3.43M | 46.92M |
| Operating Cash Flow | 177.93M | 165.54M | 164.82M | 74.33M | 63.85M | 90.29M |
| Investing Cash Flow | -144.93M | -123.75M | -158.15M | -66.17M | -72.05M | -294.78M |
| Financing Cash Flow | -86.04M | -32.78M | 231.26M | -26.48M | 17.09M | -9.10M |
Vertex Technical Analysis
Positive
11.87
Price Trends
12.48
Positive
12.55
Positive
15.75
Negative
Market Momentum
0.16
Negative
56.99
Neutral
74.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VERX, the sentiment is Positive. The current price of 11.87 is below the 20-day moving average (MA) of 12.63, below the 50-day MA of 12.48, and below the 200-day MA of 15.75, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 56.99 is Neutral, neither overbought nor oversold. The STOCH value of 74.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VERX.
Vertex Risk Analysis
Vertex disclosed 42 risk factors in its most recent earnings report. Vertex reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Vertex Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.26B | 17.72 | 18.54% | ― | 15.92% | ― | |
72 Outperform | $2.52B | -66.71 | -8.92% | ― | 15.90% | -91.64% | |
67 Neutral | $2.02B | 142.00 | 1.29% | ― | 9.58% | ― | |
66 Neutral | $2.09B | -369.91 | 1.41% | ― | 11.79% | 85.70% | |
66 Neutral | $2.26B | 45.44 | 6.54% | ― | 27.84% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $4.93B | 59.90 | 5.79% | ― | 20.67% | ― |
* Technology Sector Average
VERX
Vertex
13.40
-19.67
-59.48%
CALX
Calix
37.36
-19.14
-33.88%
NCNO
nCino
19.20
-8.14
-29.76%
GBTG
Global Business Travel Group
9.43
2.93
45.08%
INTA
Intapp
33.40
-7.10
-17.53%
FRSH
Freshworks
11.77
-1.69
-12.56%
Vertex Corporate Events
Executive/Board ChangesShareholder Meetings
Vertex Shareholders Reelect Directors, Ratify Auditor at Meeting
Positive
Jun 11, 2026
On June 10, 2026, Vertex, Inc. held its Annual Meeting of Stockholders and elected directors Eric Andersen, David DeStefano and Christopher Young to serve on the board until the 2029 Annual Meeting, unless earlier replaced. The voting results show...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.