Vertex (VERX) AI Stock Analysis

• Market Cap: $3.14B
• Dividend Yield: N/A
• Average Volume (3M): 1.75M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.99
• Revenue Growth: 13.83%
• EPS Growth: -273.23%
• Country: US
• Employees: 1,900
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.17
• Shares Outstanding: 77,372,320
• 10 Day Avg. Volume: 1,347,829
• 30 Day Avg. Volume: 1,752,977
• PEG Ratio: -0.53
• Price to Book (P/B): 46.20
• Price to Sales (P/S): 12.43
• P/FCF Ratio: 83.65
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 5.51
• Enterprise Value/Gross Profit: 8.53
• Enterprise Value/Ebitda: 57.70
• 1Y Price Target: $28.15
• Price Target Upside: 45.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 0.64
• Revenue Forecast (FY): $748.56M

• Rating: 59 Neutral
• Price Target: $20.00 ▲(3.47% Upside)

Vertex's overall score is driven by strong financial performance in revenue growth and cash flow, but is offset by profitability challenges and bearish technical indicators. The earnings call provided positive insights into cloud growth and strategic initiatives, yet highlighted risks in customer retention and guidance cuts.

Positive Factors

Cloud Revenue Growth

Strong cloud revenue growth indicates Vertex's successful transition to cloud-based solutions, enhancing its competitive position and future revenue potential.

AI and E-Invoicing Initiatives

Progress in AI and e-invoicing initiatives positions Vertex to leverage technological advancements, improving product offerings and operational efficiency.

CEO Transition

Leadership change to Christopher Young, a seasoned executive, suggests strategic focus on growth and innovation, potentially enhancing long-term business prospects.

Negative Factors

Customer Retention Challenges

Decreased customer retention due to bankruptcies poses risks to revenue stability and highlights challenges in maintaining a stable customer base.

Profitability Concerns

Ongoing profitability challenges, despite revenue growth, indicate difficulties in cost management and achieving sustainable margins.

Guidance Cuts

Consecutive guidance cuts reflect uncertainties in achieving projected growth, potentially impacting investor confidence and strategic planning.

Vertex Business Overview & Revenue Model

Company Description

Vertex, Inc. provides tax technology solutions for corporations in retail, communication, leasing, and manufacturing industries in the United States and internationally. It offers tax determination, compliance and reporting, tax data management, document management, pre-built integration, and industry-specific solutions. The company sells its software products through software license and software as a service subscriptions. It also provides implementation and training services in connection with its software license and cloud subscriptions, transaction tax returns outsourcing, and other tax-related services. Vertex, Inc. was founded in 1978 and is headquartered in King of Prussia, Pennsylvania.

How the Company Makes Money

Vertex generates revenue primarily through the sale of its software solutions and services, which include cloud-based tax automation software, consulting services, and ongoing support and maintenance. The company operates on a subscription-based model, where clients pay recurring fees for access to their software and services. Key revenue streams include licensing fees for their software products, consulting fees for tax advisory services, and transaction-based fees for their e-commerce solutions. Vertex has established significant partnerships with various ERP and e-commerce platforms, enabling them to integrate their tax solutions seamlessly and expand their customer base, thereby contributing to their earnings.

Vertex Financial Statement Overview

Summary

Vertex demonstrates strong revenue growth and healthy gross profit margins, but struggles with profitability and return on equity. The balance sheet shows improved leverage, yet cash flow growth is a concern. The company needs to enhance profitability and cash flow generation to strengthen its financial position.

Income Statement

Vertex shows a consistent revenue growth trend with a TTM growth rate of 3.05%. The gross profit margin is healthy at 65%, indicating efficient cost management. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins. The EBITDA margin remains positive, suggesting potential for operational improvements.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 1.42 in the TTM, which is an improvement from previous years. However, the negative return on equity indicates challenges in generating returns for shareholders. The equity ratio is not explicitly calculated, but the company's leverage appears manageable.

Cash Flow

Vertex's cash flow statement shows a decline in free cash flow growth, with a negative rate of -12.20% in the TTM. The operating cash flow to net income ratio is positive, indicating good cash generation relative to net income. The free cash flow to net income ratio is also positive, suggesting some level of cash flow stability despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	732.19M	666.78M	572.39M	491.62M	425.55M	374.67M
Gross Profit	472.63M	426.13M	348.58M	298.49M	263.66M	209.28M
EBITDA	69.89M	102.01M	56.95M	53.07M	41.84M	-72.54M
Net Income	-53.58M	-52.73M	-13.09M	-12.30M	-1.48M	-75.08M
Balance Sheet
Total Assets	1.22B	1.17B	759.93M	719.19M	670.21M	558.78M
Cash, Cash Equivalents and Short-Term Investments	313.51M	305.21M	77.72M	102.98M	73.33M	303.05M
Total Debt	351.37M	351.89M	66.97M	73.52M	28.61M	1.11M
Total Liabilities	957.39M	987.44M	506.95M	489.47M	440.12M	329.44M
Stockholders Equity	264.47M	179.35M	252.98M	229.72M	230.08M	229.34M
Cash Flow
Free Cash Flow	71.83M	99.05M	6.10M	3.43M	46.92M	26.74M
Operating Cash Flow	164.41M	164.82M	74.33M	63.85M	90.29M	59.54M
Investing Cash Flow	-116.46M	-158.15M	-66.17M	-72.05M	-294.78M	-44.38M
Financing Cash Flow	-15.99M	231.26M	-26.48M	17.09M	-9.10M	213.63M

Vertex Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.33
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VERX, the sentiment is Negative. The current price of 19.33 is below the 20-day moving average (MA) of 19.71, below the 50-day MA of 22.16, and below the 200-day MA of 30.83, indicating a bearish trend. The MACD of -0.70 indicates Negative momentum. The RSI at 42.07 is Neutral, neither overbought nor oversold. The STOCH value of 50.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VERX.

Vertex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRSH	72 Outperform	$3.62B	―	-2.98%	―	18.18%	70.94%
INTA	63 Neutral	$3.54B	―	-6.04%	―	17.11%	-19.12%
GBTG	62 Neutral	$4.15B	330.80	0.76%	―	5.71%	―
CALX	61 Neutral	$3.59B	―	-0.91%	―	4.89%	55.80%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NCNO	61 Neutral	$2.68B	―	-2.04%	―	12.14%	-19.29%
VERX	59 Neutral	$3.14B	―	-20.47%	―	13.83%	-273.23%

Vertex Corporate Events

Vertex Amends Credit Agreement with PNC Bank

On November 14, 2025, Vertex, Inc. entered into the First Amendment to its Amended and Restated Credit Agreement with PNC Bank and other lenders, allowing for increased capacity to make dividends or distributions, including share repurchases, under certain conditions. This amendment requires that no default events occur and that the company maintains a secured debt net leverage ratio of less than 2.50 to 1.00, potentially impacting Vertex’s financial flexibility and shareholder returns.

Vertex Announces $150 Million Stock Repurchase Program

On October 30, 2025, Vertex‘s Board of Directors authorized a stock repurchase program for up to $150 million of its Class A common stock, as part of its strategy to enhance long-term shareholder value. The company reported strong third-quarter 2025 financial results, with a 12.7% year-over-year increase in total revenues to $192.1 million and significant growth in cloud revenues. Vertex also announced leadership changes, with Christopher Young set to become the new President and CEO, succeeding David DeStefano, who will transition to a non-executive chairperson role.

Vertex Announces CEO Transition with Christopher Young

On October 21, 2025, Vertex announced the retirement of David DeStefano as CEO, effective November 10, 2025, with Christopher Young succeeding him. DeStefano will continue as non-executive Chairperson and provide consulting services until the end of 2025. Young, a seasoned executive with experience at Microsoft and McAfee, will lead Vertex into its next growth phase, focusing on leveraging generative AI in tax and compliance. The company also reported preliminary third-quarter 2025 financial results, with expected revenue of $192 million, up from $170.4 million the previous year, and adjusted EBITDA of $43 million, compared to $38.6 million.