Vertex (VERX) AI Stock Analysis

• Market Cap: $3.22B
• Dividend Yield: N/A
• Average Volume (3M): 1.77M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.01
• 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: 2,369,336
• 30 Day Avg. Volume: 1,766,608
• 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: 1.25
• Enterprise Value/Revenue: 5.51
• Enterprise Value/Gross Profit: 8.53
• Enterprise Value/Ebitda: 57.70
• 1Y Price Target: $28.15
• Price Target Upside: 41.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 0.64
• Revenue Forecast (FY): $748.56M

• Rating: 55 Neutral
• Price Target: $21.00 ▲(5.26% Upside)

Vertex's overall stock score is primarily impacted by its financial performance, which shows strong revenue growth but significant profitability challenges. Technical analysis indicates bearish momentum, while valuation metrics are weak due to negative earnings. The earnings call provides some optimism with strategic growth initiatives, but customer retention issues and guidance cuts pose risks.

Positive Factors

Cloud Revenue Growth

Strong cloud revenue growth indicates successful strategic initiatives, enhancing Vertex's competitive position in the tax technology sector.

Cash Flow Generation

Robust cash flow generation supports operational flexibility and potential reinvestment in growth initiatives, strengthening long-term financial health.

AI and E-Invoicing Initiatives

Progress in AI and e-invoicing initiatives enhances product offerings, positioning Vertex for future growth in an evolving regulatory landscape.

Negative Factors

High Leverage

Significant leverage poses financial risks, potentially limiting Vertex's ability to invest in growth and manage economic downturns effectively.

Profitability Challenges

Ongoing profitability issues hinder Vertex's ability to improve valuation metrics and reinvest in business expansion, impacting long-term growth.

Customer Retention Issues

Decreased customer retention due to bankruptcies affects revenue stability, posing challenges to maintaining consistent growth and market share.

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 its subscription-based model, offering its software solutions on a recurring basis to clients. Key revenue streams include fees from its cloud-based tax automation services, consulting services for tax compliance and strategy, and implementation services for integrating these solutions into client operations. The company also benefits from strategic partnerships with enterprise resource planning (ERP) providers, which expand its market reach and enhance the functionality of its offerings. Additionally, Vertex may receive revenue from training and support services, providing ongoing assistance to clients in utilizing its software effectively.

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: 19.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 19.95 is below the 20-day moving average (MA) of 21.76, below the 50-day MA of 23.66, and below the 200-day MA of 33.00, indicating a bearish trend. The MACD of -1.32 indicates Positive momentum. The RSI at 33.71 is Neutral, neither overbought nor oversold. The STOCH value of 60.59 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	68 Neutral	$3.41B	―	-2.98%	―	18.18%	70.94%
INTA	63 Neutral	$3.53B	―	-6.04%	―	17.11%	-19.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CALX	61 Neutral	$3.89B	―	-0.91%	―	4.89%	55.80%
NCNO	61 Neutral	$2.96B	―	-3.15%	―	13.24%	-12.97%
GBTG	58 Neutral	$3.76B	318.75	0.76%	―	5.71%	―
VERX	55 Neutral	$3.22B	―	-20.47%	―	13.83%	-273.23%

Vertex Corporate Events

Vertex Reports Strong Q3 2025 Results and Stock Buyback

Vertex, Inc. is a leading global provider of indirect tax solutions, offering tailored tax technology for major industries to help businesses comply and grow with confidence. In its third quarter of 2025, Vertex reported double-digit revenue growth and robust profitability, alongside the introduction of a $150 million stock repurchase program. The company achieved total revenues of $192.1 million, marking a 12.7% increase year-over-year, with significant growth in cloud revenues at 29.6%. Despite a slight decline in net income compared to the previous year, Vertex’s non-GAAP operating income and adjusted EBITDA showed positive growth. Looking forward, Vertex anticipates continued revenue growth and improved profitability, driven by increasing demand for cloud migrations and complex tax solutions, as well as a strategic leadership transition with Christopher Young taking over as CEO.

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.

The most recent analyst rating on (VERX) stock is a Hold with a $27.00 price target. To see the full list of analyst forecasts on Vertex stock, see the VERX Stock Forecast page.

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.

The most recent analyst rating on (VERX) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on Vertex stock, see the VERX Stock Forecast page.

Vertex, Inc. Reports Strong Revenue Growth Amid Challenges

Vertex, Inc. is a leading global provider of indirect tax solutions, offering tailored tax technology for businesses across various industries to manage complex tax compliance. In its second quarter of 2025, Vertex reported a double-digit revenue growth, driven by increased demand for its solutions amid growing complexities in indirect tax regulations. Key financial highlights include a 14.6% year-over-year increase in total revenues to $184.6 million, with software subscription revenues rising by 15.7% and cloud revenues surging by 29.9%. The company’s Annual Recurring Revenue (ARR) reached $636.6 million, marking a 16.1% increase compared to the previous year. Despite these positive trends, Vertex reported a net loss of $1.0 million, contrasting with a net income of $5.2 million in the same period last year, attributed to extended sales cycles and delayed customer decision-making impacting new contract signings. Looking ahead, Vertex remains optimistic about its growth prospects, with expectations for continued revenue increases driven by ERP cloud conversions and global e-invoicing mandates, although it has adjusted its financial guidance for the full year 2025 due to recent market challenges.

Vertex, Inc. Navigates Growth Amid Challenges

Vertex, Inc. Balances Growth with Challenges in Latest Earnings Call