Vertex (VERX) AI Stock Analysis

• Market Cap: $4.01B
• Dividend Yield: N/A
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 235.5
• Beta (1Y): 0.95
• 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: 1,380,437
• 30 Day Avg. Volume: 1,588,237
• 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: 1.41
• Enterprise Value/Revenue: 7.96
• Enterprise Value/Gross Profit: 12.25
• Enterprise Value/Ebitda: 77.76
• 1Y Price Target: $34.50
• Price Target Upside: 39.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 52 Neutral
• Price Target: $25.00 ▲(0.81% Upside)

Vertex's overall stock score reflects a combination of strong revenue growth and effective cost management, offset by significant challenges in profitability and valuation. The technical analysis indicates a bearish trend, and the negative P/E ratio highlights ongoing financial difficulties. While the earnings call provided some positive insights, the overall sentiment remains balanced due to macroeconomic pressures and reduced guidance.

Positive Factors

Revenue Growth

Vertex's consistent revenue growth highlights its ability to expand its market presence and enhance product adoption, supporting long-term business sustainability.

Cloud Revenue Expansion

Strong growth in cloud revenue underscores Vertex's successful transition to cloud-based solutions, aligning with industry trends and enhancing competitive positioning.

Cash Flow Management

Solid cash flow management provides Vertex with the financial flexibility to invest in growth opportunities and improve its financial health over the long term.

Negative Factors

Profitability Challenges

Ongoing profitability issues may hinder Vertex's ability to reinvest in business growth and could impact its financial stability if not addressed.

High Leverage

High leverage can limit Vertex's financial flexibility and increase risk, necessitating a focus on reducing debt to enhance long-term stability.

Reduced Guidance

Lowered guidance reflects potential challenges in market conditions, which could impact Vertex's growth trajectory and investor confidence in the near term.

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 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: 24.80
• 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 24.8 is below the 20-day moving average (MA) of 24.88, below the 50-day MA of 26.15, and below the 200-day MA of 37.79, indicating a bearish trend. The MACD of -0.36 indicates Negative momentum. The RSI at 45.37 is Neutral, neither overbought nor oversold. The STOCH value of 49.05 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
GBTG	68 Neutral	$3.88B	―	-4.72%	―	3.61%	-44.99%
FRSH	67 Neutral	$3.30B	―	-5.23%	―	19.78%	47.51%
INTA	65 Neutral	$3.27B	―	-3.95%	―	17.09%	48.66%
CALX	65 Neutral	$3.95B	―	-3.52%	―	-8.80%	-657.91%
NCNO	64 Neutral	$3.02B	―	-3.15%	―	13.24%	-12.97%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
VERX	52 Neutral	$4.01B	235.54	-20.95%	―	15.00%	-349.61%

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.