Vertex (VERX) AI Stock Analysis

• Market Cap: $2.12B
• Dividend Yield: N/A
• Average Volume (3M): 2.69M
• Price to Earnings (P/E): 280.3
• Beta (1Y): 1.11
• 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: 3,768,498
• 30 Day Avg. Volume: 2,687,562
• PEG Ratio: -3.48
• Price to Book (P/B): 11.12
• Price to Sales (P/S): 3.85
• P/FCF Ratio: 41.56
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 2.89
• Enterprise Value/Gross Profit: 4.55
• Enterprise Value/Ebitda: 31.80
• 1Y Price Target: $18.45
• Price Target Upside: 39.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: $13.00 ▼(-1.96% Downside)
• Action: Reiterated Date: 02/17/26
• Date: Action: Reiterated 02/17/26

The score is driven by solid cash generation and improving profitability, supported by constructive 2026 guidance for re-accelerating growth and stronger adjusted EBITDA margins. Offsetting this are very bearish technicals (price far below key moving averages with weak momentum signals) and an unattractive valuation with an extremely high P/E.

Positive Factors

Strong cash generation

Consistent operating cash flow near $165M annually provides durable internal funding for product investment, M&A, debt service and buybacks. That cash cushion reduces reliance on capital markets and supports multi-quarter execution even if GAAP profitability remains uneven.

Recurring cloud revenue and retention

High ARR and >100% net revenue retention combined with rapid cloud growth establish predictable, subscription-driven cashflows. This mix supports sustained revenue expansion, higher lifetime value per customer and easier scaling of margins over the medium term as cloud penetration increases.

Product innovation and e‑invoicing traction

Demonstrable early wins from AI tools and e‑invoicing create new upsell vectors and higher wallet share per customer. These structural product differentiators strengthen competitive positioning and multi-year monetization opportunities beyond core tax calculation functionality.

Negative Factors

Elevated leverage

A sizeable debt load relative to equity raises refinancing and covenant risk if growth or margins slip. Higher leverage constrains financial flexibility for strategic investments or buybacks and makes the firm more sensitive to cash flow volatility over the next several quarters.

Margin pressure from services and higher spend

Declining services margins and sustained increases in R&D and sales spend compress operating leverage. If uplift from product-led cloud growth lags, elevated opex and weaker services profitability could keep adjusted margins volatile and limit sustainable EBITDA expansion.

Uncertain timing of large SAP migration wins

Reliance on SAP S/4HANA migration cycles to drive large deals introduces timing risk. Prolonged sales cycles or delayed customer decisions can defer expected ARR acceleration, making revenue and margin improvement more lumpy and harder to rely on over a 2–6 month horizon.

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

Cash flow is a key strength with consistently positive and strong operating cash flow (~$165M in 2024–2025) and solid free cash flow, though FCF dipped in 2025. Profitability has improved to slightly positive net income in 2025, but operating leverage remains inconsistent and EBITDA margin volatility is a concern. The balance sheet adds risk with sizeable debt (~$360M) relative to equity (~$259M).

Income Statement

Revenue growth has been consistently strong from 2020–2024 (mid-teens annually), but growth cooled sharply in 2025 (~2%). Profitability has improved materially versus the deep 2020 loss, with 2025 turning slightly profitable (net margin ~1%), though operating profit remains around break-even/negative, suggesting the business is still working through operating leverage. Gross margins are consistently healthy (~61–64%), but the sharp step-down in EBITDA margin in 2025 (vs. 2024) highlights volatility in operating profitability.

Balance Sheet

The balance sheet is mixed: equity has strengthened in 2025, but debt remains sizeable (Total Debt ~$360M vs. Equity ~$259M). Leverage increased substantially versus earlier years (2020–2022), and while 2025 shows improved net income, returns on equity were negative in prior years, indicating historical difficulty converting the capital base into durable earnings. Overall, the company has adequate scale in assets, but the higher leverage profile raises financial risk if profitability softens.

Cash Flow

Cash generation is a relative strength: operating cash flow is consistently positive and has grown meaningfully since 2022, remaining strong in 2024–2025 (~$165M each year). Free cash flow is solid and positive, though it declined modestly in 2025 after a strong 2024, indicating some pressure from reinvestment or working capital. With net income near breakeven, the company’s ability to produce substantial cash flow provides a cushion, but the recent free-cash-flow pullback is worth monitoring.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	748.44M	666.78M	572.39M	491.62M	425.55M
Gross Profit	454.51M	426.13M	348.58M	298.49M	263.66M
EBITDA	104.51M	102.01M	56.95M	53.07M	41.84M
Net Income	7.21M	-52.73M	-13.09M	-12.30M	-1.48M
Balance Sheet
Total Assets	1.27B	1.17B	759.93M	719.19M	670.21M
Cash, Cash Equivalents and Short-Term Investments	314.01M	305.21M	77.72M	102.98M	73.33M
Total Debt	359.62M	351.89M	66.97M	73.52M	28.61M
Total Liabilities	1.01B	987.44M	506.95M	489.47M	440.12M
Stockholders Equity	258.92M	179.35M	252.98M	229.72M	230.08M
Cash Flow
Free Cash Flow	69.31M	99.05M	6.10M	3.43M	46.92M
Operating Cash Flow	165.54M	164.82M	74.33M	63.85M	90.29M
Investing Cash Flow	-123.75M	-158.15M	-66.17M	-72.05M	-294.78M
Financing Cash Flow	-32.78M	231.26M	-26.48M	17.09M	-9.10M

Vertex Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.26
• 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 13.26 is below the 20-day moving average (MA) of 15.03, below the 50-day MA of 17.89, and below the 200-day MA of 26.07, indicating a bearish trend. The MACD of -1.74 indicates Positive momentum. The RSI at 36.43 is Neutral, neither overbought nor oversold. The STOCH value of 20.34 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	71 Outperform	$2.02B	11.01	16.93%	―	18.18%	70.94%
CALX	68 Neutral	$3.51B	212.82	2.18%	―	4.89%	55.80%
INTA	66 Neutral	$1.71B	-73.01	-5.41%	―	17.11%	-19.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GBTG	61 Neutral	$2.67B	23.72	0.76%	―	5.71%	―
NCNO	59 Neutral	$1.76B	-81.31	-2.04%	―	12.14%	-19.29%
VERX	56 Neutral	$2.12B	280.34	3.29%	―	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.

The most recent analyst rating on (VERX) stock is a Buy with a $28.00 price target. To see the full list of analyst forecasts on Vertex stock, see the VERX Stock Forecast page.