Vertex (VERX) AI Stock Analysis

• Market Cap: $4.05B
• Dividend Yield: N/A
• Average Volume (3M): 1.51M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.94
• Revenue Growth: 15.00%
• EPS Growth: -349.61%
• Country: US
• Employees: 1,900
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.15
• Shares Outstanding: 77,318,570
• 10 Day Avg. Volume: 1,355,829
• 30 Day Avg. Volume: 1,506,394
• 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: 1.40
• Enterprise Value/Revenue: 7.96
• Enterprise Value/Gross Profit: 12.25
• Enterprise Value/Ebitda: 77.76
• 1Y Price Target: $35.42
• Price Target Upside: 38.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 59 Neutral
• Price Target: $27.00 ▲(5.22% Upside)

Vertex's overall stock score is driven by its strong revenue growth and effective cost management, which are offset by ongoing profitability challenges and high leverage. The technical analysis suggests a neutral outlook, while valuation metrics indicate potential overvaluation. The earnings call provides a balanced view with both growth opportunities and risks, particularly from macroeconomic factors and regulatory challenges.

Positive Factors

Revenue Growth

Vertex's consistent revenue growth indicates strong demand for its tax technology solutions, supporting its market position and potential for future expansion.

New Product Launch

The launch of an AI-native tax solution enhances Vertex's product offerings, potentially increasing market share and addressing evolving client needs in tax compliance.

Leadership Transition

The CEO transition to Christopher Young could bring fresh strategic perspectives and leadership, potentially driving innovation and growth for Vertex.

Negative Factors

Profitability Challenges

Ongoing profitability issues, with negative net income and high leverage, may hinder Vertex's ability to reinvest in growth and manage financial risks effectively.

Regulatory Challenges

Regulatory changes in key markets like Brazil could disrupt operations and delay revenue realization, impacting Vertex's growth and market adaptability.

Reduced Guidance

Reduced financial guidance reflects potential challenges in achieving growth targets, possibly due to broader economic conditions affecting customer spending.

Vertex Business Overview & Revenue Model

Company Description

Vertex, Inc. (VERX) is a leading provider of tax technology solutions, specializing in the automation of sales and use tax compliance for businesses across various sectors. The company offers a comprehensive suite of software solutions that streamline tax calculation, reporting, and compliance processes. Vertex serves a diverse clientele, including multinational corporations and small businesses, by delivering cloud-based solutions that adapt to the complexities of tax regulations globally, thereby enhancing operational efficiency and accuracy in tax management.

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 shows promising revenue growth and effective cost management, as reflected in its strong gross profit margin. However, profitability remains a concern due to persistent negative net income and high leverage. The company demonstrates solid cash flow generation, which could be leveraged to improve financial health. Addressing profitability and reducing leverage are key to enhancing overall financial performance.

Income Statement

Vertex shows a consistent revenue growth trend, with a TTM growth rate of 3.41%. However, profitability remains a challenge, as evidenced by negative net profit margins and EBIT margins. The gross profit margin is relatively strong at 63.54% TTM, indicating efficient cost management. Despite revenue growth, the company needs to address its negative net income to improve overall profitability.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 1.75 TTM, indicating significant leverage. Return on equity is negative, suggesting inefficiencies in generating returns for shareholders. The equity ratio is not directly provided, but the high leverage and negative ROE highlight potential financial risks. Strengthening equity and reducing debt could enhance financial stability.

Cash Flow

Vertex demonstrates positive cash flow trends, with a TTM free cash flow growth rate of 5.81%. The operating cash flow to net income ratio is strong, indicating good cash generation relative to net income. However, the free cash flow to net income ratio suggests room for improvement in converting earnings into free cash flow. Overall, cash flow management appears solid, but further enhancement is needed to support profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	710.51M	666.78M	572.39M	491.62M	425.55M	374.67M
Gross Profit	461.84M	426.13M	348.58M	298.49M	263.66M	209.28M
EBITDA	72.74M	102.01M	56.95M	53.07M	41.84M	-72.54M
Net Income	-50.41M	-52.73M	-13.09M	-12.30M	-1.48M	-78.94M
Balance Sheet
Total Assets	1.20B	1.17B	759.93M	719.19M	670.21M	554.93M
Cash, Cash Equivalents and Short-Term Investments	284.39M	305.21M	77.72M	102.98M	73.33M	303.05M
Total Debt	351.89M	351.89M	66.97M	73.52M	28.61M	1.11M
Total Liabilities	950.15M	987.44M	506.95M	489.47M	440.12M	329.44M
Stockholders Equity	248.04M	179.35M	252.98M	229.72M	230.08M	225.49M
Cash Flow
Free Cash Flow	81.81M	99.05M	6.10M	3.43M	46.92M	26.74M
Operating Cash Flow	143.34M	164.82M	74.33M	76.85M	91.97M	59.54M
Investing Cash Flow	-169.58M	-158.15M	-66.17M	-85.05M	-296.46M	-44.38M
Financing Cash Flow	-29.88M	231.26M	-26.48M	17.09M	-9.10M	213.63M

Vertex Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 25.66
• 50DMA: Positive
• 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 25.66 is above the 20-day moving average (MA) of 25.09, above the 50-day MA of 25.04, and below the 200-day MA of 35.71, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 48.50 is Neutral, neither overbought nor oversold. The STOCH value of 51.82 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	―	$3.32B	―	-5.23%	―	19.78%	47.51%
GBTG	―	$3.84B	―	-4.72%	―	3.61%	-44.99%
CALX	―	$4.03B	-152.32	-3.52%	―	-8.80%	-657.91%
INTA	―	$3.26B	―	-3.95%	―	17.09%	48.66%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NCNO	―	$3.11B	―	-3.15%	―	13.24%	-12.97%
VERX	―	$4.05B	―	-20.95%	―	15.00%	-349.61%

Vertex Corporate Events

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