Vertex (VERX) AI Stock Analysis

• Market Cap: $5.69B
• Dividend Yield: N/A
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): 235.5
• Beta (1Y): 0.95
• Revenue Growth: 15.20%
• EPS Growth: -666.94%
• Country: US
• Employees: 1,900
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Application
• EPS (TTM): 0.15
• Shares Outstanding: 72,005,250
• 10 Day Avg. Volume: 1,014,050
• 30 Day Avg. Volume: 1,442,145
• PEG Ratio: -8.04
• Price to Book (P/B): 26.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 72.75
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 2.15
• Enterprise Value/Gross Profit: 12.87
• Enterprise Value/Ebitda: 17.44
• 1Y Price Target: $47.71
• Price Target Upside: 37.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 66 Neutral
• Price Target: $38.00 ▲(9.26%Upside)

Vertex's strong revenue growth and strategic investments highlighted in the earnings call are significant positives. However, challenges with profitability, high liabilities, and a negative P/E ratio weigh on the stock's overall attractiveness.

Positive Factors

Cloud Revenue

Cloud revenue grew 30% year-over-year, indicating strong growth in this segment.

Partnerships

Strong partnerships at SAP and ORCL could emerge as a new growth vector across new and existing customers.

Negative Factors

Free Cash Flow

FCF was less than consensus estimates, falling to negative $12mm, the first negative FCF margin in two years.

Organic Revenue Growth

Organic revenue growth decelerated to 10% from 12%, and while backward looking, is indicative of lackluster growth.

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 and services, which include both cloud-based and on-premise solutions. The company's key revenue streams involve subscription fees for its software-as-a-service (SaaS) offerings, professional services, and customer support. Vertex's SaaS model provides recurring revenue as clients subscribe to use their automated tax solutions. Additionally, the company earns income through consulting services that help businesses implement and optimize their tax management systems. Partnerships with major ERP and financial software providers, such as SAP, Oracle, and Microsoft, enhance Vertex's market reach and integration capabilities, contributing to its revenue growth.

Vertex Financial Statement Overview

Summary

Vertex shows strong revenue growth and effective cash management, but faces profitability challenges with recurring net losses and negative EBIT margins. The capital structure is balanced, but high liabilities pose risks.

Income Statement

Vertex has shown a consistent revenue growth trajectory over the years, with a significant increase in revenue from 2020 to TTM 2025. Despite the positive revenue growth, the company struggles with profitability, as indicated by negative net income margins across all periods. The gross profit margin remains healthy, suggesting good control over production costs, but the negative EBIT and net income margins indicate challenges in managing operating and other expenses.

Balance Sheet

The balance sheet reflects a stable equity base with a moderate debt-to-equity ratio, which suggests a balanced capital structure. Stockholders' equity has been gradually increasing, indicating a positive financial health trajectory. However, the company’s liabilities are high compared to its assets, which could pose risks if not managed properly.

Cash Flow

Vertex's cash flow statement shows strong operating cash flows, which consistently cover the net income, indicating good cash management. The free cash flow has also improved over time, showing efficient capital expenditure management. However, fluctuations in investing and financing cash flows suggest variability in investment and funding strategies.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	666.78M	572.39M	491.62M	425.55M	374.67M
Gross Profit	426.13M	348.58M	298.49M	263.66M	209.28M
EBITDA	102.01M	56.95M	53.07M	41.84M	-72.54M
Net Income	-52.73M	-13.09M	-12.30M	-1.48M	-78.94M
Balance Sheet
Total Assets	1.17B	759.93M	719.19M	670.21M	554.93M
Cash, Cash Equivalents and Short-Term Investments	305.21M	77.72M	102.98M	73.33M	303.05M
Total Debt	351.89M	66.97M	73.52M	28.61M	1.11M
Total Liabilities	987.44M	506.95M	489.47M	440.12M	329.44M
Stockholders Equity	179.35M	252.98M	229.72M	230.08M	225.49M
Cash Flow
Free Cash Flow	99.05M	6.10M	3.43M	46.92M	26.74M
Operating Cash Flow	164.82M	74.33M	76.85M	91.97M	59.54M
Investing Cash Flow	-158.15M	-66.17M	-85.05M	-296.46M	-44.38M
Financing Cash Flow	231.26M	-26.48M	17.09M	-9.10M	213.63M

Vertex Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 34.78
• 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 34.78 is below the 20-day moving average (MA) of 35.32, below the 50-day MA of 37.04, and below the 200-day MA of 43.42, indicating a bearish trend. The MACD of -0.43 indicates Negative momentum. The RSI at 44.12 is Neutral, neither overbought nor oversold. The STOCH value of 42.65 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
PEGA	79 Outperform	$9.92B	50.18	41.55%	0.18%	12.47%	65.19%
CWAN	78 Outperform	$6.03B	12.79	58.14%	―	23.21%	―
QXO	78 Outperform	$14.83B	―	1.44%	―	0.22%	48.10%
CVLT	74 Outperform	$7.44B	99.07	25.23%	―	18.63%	-55.09%
U	68 Neutral	$13.89B	―	-14.15%	―	-16.74%	49.75%
VERX	66 Neutral	$5.69B	235.54	-19.65%	―	15.20%	-666.94%
Sector *	63 Neutral	$34.70B	4.89	-11.39%	1.66%	5.53%	-19.00%

Vertex Corporate Events

Vertex Elects New Directors at Annual Meeting

On June 11, 2025, Vertex, Inc. conducted its Annual Meeting of Stockholders where Philip Saunders, J. Richard Stamm, and Mark J. Mendola were elected as directors, each to serve until the 2028 Annual Meeting. Additionally, the appointment of Crowe LLP as the independent auditor for the fiscal year ending December 31, 2025, was ratified.

The most recent analyst rating on (VERX) stock is a Hold with a $44.00 price target. To see the full list of analyst forecasts on Vertex stock, see the VERX Stock Forecast page.