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Vertex
(NASDAQ:VERX)
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Rating:66Neutral
Price Target:
$14.00
▲(13.36% Upside)
Action:Reiterated
Date:06/12/26
VERX scores solidly on fundamentals primarily due to strong free cash flow generation and sharply reduced leverage, supported by a generally positive earnings update with raised adjusted EBITDA guidance. The score is held back by weak technical positioning (below key moving averages), limited valuation support given negative earnings and no dividend data, and near-term restructuring impacts despite longer-term efficiency targets.
Positive Factors
Strong free cash flow generation
Sustained and growing free cash flow provides durable internal funding for product investment, M&A, buybacks and debt paydown. Over 2–6 months this supports execution of the value-creation plan, reduces reliance on external financing and improves resilience through business cycles.
Negative Factors
Moderated medium-term revenue growth outlook
A reset to low-double-digit medium-term growth reduces the pace at which scale economics and market share gains compound. Slower top-line expansion may delay margin expansion and returns, requiring stronger execution on cross-sell, e‑invoicing ramps and AI monetization to hit long-term targets.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Sustained and growing free cash flow provides durable internal funding for product investment, M&A, buybacks and debt paydown. Over 2–6 months this supports execution of the value-creation plan, reduces reliance on external financing and improves resilience through business cycles.
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
$2.08B
Dividend YieldN/A
Average Volume (3M)1.71M
Price to Earnings (P/E)―
Beta (1Y)1.09
Revenue Growth11.79%
EPS Growth85.70%
CountryUS
Employees1,900
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.04
Shares Outstanding79,661,290
10 Day Avg. Volume2,135,063
30 Day Avg. Volume1,711,663
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 Cap0.94
Enterprise Value/Revenue2.53
Enterprise Value/Gross Profit4.07
Enterprise Value/Ebitda26.53
Forecast
1Y Price Target
$16.90Price Target Upside36.84% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)0.8
Revenue Forecast (FY)$827.32M
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:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial start to the year: the company beat quarterly revenue and adjusted EBITDA guidance, delivered double‑digit ARR growth, improved margins, and achieved Q1 free cash flow positivity. Management announced a deliberate value-creation program (≈9% workforce reduction and third-party spend cuts) that increases near-term charges but is expected to produce $60M–$70M of annualized cash savings beginning in 2027 and has already supported an upward adjustment to full-year adjusted EBITDA guidance. Key growth drivers include cloud and e-invoicing momentum, AI product traction (smart categorization) and the Brinta acquisition for Latin America and AI capability. However, risks and headwinds include a moderated medium‑term revenue growth outlook (low double digits vs prior higher targets), the need for back‑half acceleration in cloud revenue to meet yearly targets, one-time restructuring costs and the timing lag before cost savings are fully realized. Overall, the company is trading faster profitability and cash conversion for near-term restructuring impacts while positioning to monetize e‑invoicing and AI adjacencies over time.Positive Updates
Revenue Beat and YoY Growth
Total revenue of $196.6 million in Q1, up 11.1% year-over-year and above the high end of company guidance.
Negative Updates
Moderation in Revenue Growth Outlook
Management now frames medium-term revenue growth as low double digits (roughly 10%–13%), below prior mid-teens/high‑teens assumptions and a reset from previous 2028 targets.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Beat and YoY Growth
Total revenue of $196.6 million in Q1, up 11.1% year-over-year and above the high end of company guidance.
Read all positive updates
Company Guidance
Management said Q1 results beat expectations with revenue of $196.6M and adjusted EBITDA of $44.1M; Q1 metrics included total revenue +11.1% YoY, subscription +10.9%, services +12.2%, cloud +20.7% (cloud ≈60% of subscription revenue), ARR +11.2%, gross revenue retention 95%, AARPC $140,464 (+11% YoY), scaled customer count +12%, non‑GAAP gross margin +50 bps and adjusted EBITDA +18.4% YoY, with free cash flow of $7.7M. After a ~9% workforce reduction (Q1 pretax severance $6.2M plus ~$2.6M transaction costs), they expect ~$60–$70M of annual cash savings on a fully run‑rate basis starting in 2027 (net of reinvestments). Guidance is Q2 revenue $200–204M and Q2 adjusted EBITDA $47–50M; full‑year revenue unchanged at $823.5–831.5M, full‑year adjusted EBITDA raised to $202–208M (from $188–192M), and full‑year cloud revenue growth targeted at 25%. They repurchased $20M of stock at an average $14.59/share, now expect Investor Day profitability/free‑cash‑flow targets a year earlier (2027), and view medium‑term revenue growth in the low double digits (roughly 10–13%).Vertex Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
74
Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 768.03M | 748.44M | 666.78M | 572.39M | 491.62M | 425.55M |
| Gross Profit | 478.51M | 454.51M | 426.13M | 348.58M | 298.49M | 263.66M |
| EBITDA | 73.34M | 104.51M | 102.01M | 56.95M | 53.07M | 41.84M |
| Net Income | -6.43M | 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 | 252.46M | 314.01M | 305.21M | 77.72M | 102.98M | 73.33M |
| Total Debt | 350.14M | 359.62M | 351.89M | 66.97M | 73.52M | 28.61M |
| Total Liabilities | 967.86M | 1.01B | 987.44M | 506.95M | 489.47M | 440.12M |
| Stockholders Equity | 246.50M | 258.92M | 179.35M | 252.98M | 229.72M | 230.08M |
Cash Flow | ||||||
| Free Cash Flow | 93.54M | 69.31M | 99.05M | 6.10M | 3.43M | 46.92M |
| Operating Cash Flow | 193.04M | 165.54M | 164.82M | 74.33M | 63.85M | 90.29M |
| Investing Cash Flow | -158.18M | -123.75M | -158.15M | -66.17M | -72.05M | -294.78M |
| Financing Cash Flow | -69.78M | -32.78M | 231.26M | -26.48M | 17.09M | -9.10M |
Vertex Technical Analysis
Positive
12.35
Price Trends
12.70
Positive
12.76
Positive
16.93
Negative
Market Momentum
-0.03
Negative
61.34
Neutral
92.78
Negative
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 12.35 is above the 20-day moving average (MA) of 11.93, below the 50-day MA of 12.70, and below the 200-day MA of 16.93, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 61.34 is Neutral, neither overbought nor oversold. The STOCH value of 92.78 is Negative, 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.92B | 16.20 | 18.54% | ― | 15.92% | ― | |
72 Outperform | $2.13B | -57.51 | -8.92% | ― | 15.90% | -91.64% | |
67 Neutral | $1.99B | 138.92 | 1.29% | ― | 9.58% | ― | |
66 Neutral | $2.08B | -383.95 | -2.53% | ― | 11.79% | 85.70% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $2.45B | 74.31 | 4.25% | ― | 28.38% | ― | |
60 Neutral | $4.90B | 59.58 | 5.79% | ― | 20.67% | ― |
* Technology Sector Average
VERX
Vertex
13.40
-22.75
-62.93%
CALX
Calix
38.41
-14.17
-26.95%
NCNO
nCino
18.06
-11.48
-38.86%
GBTG
Global Business Travel Group
9.39
3.00
46.95%
INTA
Intapp
28.18
-19.08
-40.37%
FRSH
Freshworks
10.38
-4.83
-31.76%
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...
Business Operations and Strategy
Vertex Launches Global Value Creation and AI Initiative
Negative
Apr 28, 2026
On April 28, 2026, Vertex, Inc. announced that its board approved a global Value Creation Plan aimed at becoming a more AI-enabled company, sharpening investment on key growth opportunities and improving operational efficiency. As part of this pla...
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.