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Vertex Pharmaceuticals
(NASDAQ:VRTX)
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Rating:75Outperform
Price Target:
$539.00
▲(12.91% Upside)
Action:Reiterated
Date:08/05/26
VRTX scores well primarily due to strong financial performance (high margins, solid free cash flow, and a conservative balance sheet) and a positive earnings-call backdrop with raised 2026 guidance and launch/pipeline progress. The overall score is tempered by only neutral technical momentum and a middling valuation (P/E ~28 with no dividend yield provided), plus near-term margin/OpEx pressure and volatility risks highlighted on the call.
Positive Factors
High Profitability
Vertex’s very high gross and operating margins reflect strong pricing power and patent-protected therapies, producing durable earnings conversion. Structural margin strength supports sustained R&D reinvestment, commercial expansion, and resilience to cyclical revenue swings over the next 2–6 months.
Negative Factors
Rising Operating Spend
Elevated commercial and R&D investment planned at the high end of guidance will weigh on operating leverage near term. If incremental sales or scale benefits lag, persistent higher SG&A could depress non‑GAAP margins and slow free cash flow expansion across upcoming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability
Vertex’s very high gross and operating margins reflect strong pricing power and patent-protected therapies, producing durable earnings conversion. Structural margin strength supports sustained R&D reinvestment, commercial expansion, and resilience to cyclical revenue swings over the next 2–6 months.
Read all positive factors
Vertex Pharmaceuticals Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down sales by region so you can see how reliant Vertex is on the U.S. versus Europe and other markets. Geographic concentration highlights exposure to local pricing, reimbursement, and regulatory risks, while growth outside core markets points to new patient access and diversification opportunities.
Breaks down sales by region so you can see how reliant Vertex is on the U.S. versus Europe and other markets. Geographic concentration highlights exposure to local pricing, reimbursement, and regulatory risks, while growth outside core markets points to new patient access and diversification opportunities.
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The Fly
The FlyVertex Pharmaceuticals (VRTX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$128.19B
Dividend YieldN/A
Average Volume (3M)1.75M
Price to Earnings (P/E)29.8
Beta (1Y)0.50
Revenue Growth11.45%
EPS Growth22.53%
CountryUS
Employees6,400
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)17.32
Shares Outstanding253,460,920
10 Day Avg. Volume1,243,500
30 Day Avg. Volume1,747,532
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)6.21
Price to Sales (P/S)9.60
P/FCF Ratio36.30
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$565.32Price Target Upside18.43% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering26
EPS Forecast (FY)18.75
Revenue Forecast (FY)$13.22B
Vertex Pharmaceuticals Business Overview & Revenue Model
Company Description
Vertex Pharmaceuticals Incorporated is a leading biotechnology firm primarily focused on the discovery, advancement, and marketing of innovative treatments, particularly for cystic fibrosis (CF). The company offers a range of approved medications ...
How the Company Makes Money
Vertex primarily makes money by selling its approved prescription medicines, with the largest revenue contribution coming from its cystic fibrosis (CF) franchise. Revenue is recognized from product sales to a network of wholesalers, specialty dist...
Vertex Pharmaceuticals Earnings Call Summary
Earnings Call Date:Aug 03, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call presented a largely positive commercial and clinical update: revenue and key product launches (ALYFTREK, CASGEVY, JOURNAVX) showed strong momentum, guidance was raised, multiple clinical and regulatory milestones were achieved or on track (Pove BLA accepted, AMPLITUDE/AMPLIFIED/AGLOW enrollment complete or progressing, VX‑017 IND cleared), and the Crinetics acquisition adds a new specialty pillar. Offsetting factors include higher SG&A and upcoming operating expense at the high end of guidance, gross margin pressure from product mix and manufacturing investments, short‑term revenue volatility for cell therapies and PSP‑driven gross‑to‑net impacts (normalization expected in H1 2027), and near‑term costs and debt associated with the Crinetics deal. Overall, the positive commercial execution and pipeline progress outweigh the near‑term cost and execution risks.Positive Updates
Total Revenue Growth
Q2 2026 total revenue of $3.3 billion, up 12% year‑over‑year; company raised full‑year 2026 revenue guidance to $13.1–$13.2 billion.
Negative Updates
Rising Commercial Spend
Non‑GAAP SG&A expense of $520 million in Q2 2026 increased 45% year‑over‑year, driven by investments in pain and renal commercial infrastructure; management expects to be at the high end of combined non‑GAAP operating expense guidance ($5.65B–$5.75B).
Read all updates
Q2-2026 Updates
Positive
Negative
Total Revenue Growth
Q2 2026 total revenue of $3.3 billion, up 12% year‑over‑year; company raised full‑year 2026 revenue guidance to $13.1–$13.2 billion.
Read all positive updates
Company Guidance
Vertex raised full‑year 2026 revenue guidance to $13.1–$13.2 billion while reiterating expectations for at least $500 million of non‑CF revenue and a roughly 150 basis‑point net benefit from foreign exchange; full‑year gross margin is expected to be just under 86% and combined non‑GAAP operating expenses are guided to $5.65–$5.75 billion (with management expecting to be at the high end). They expect a non‑GAAP effective tax rate of 19.5%–20.5% for 2026 (YTD at 20.4%), noted that the pending Crinetics acquisition (~$8.8 billion net of cash, to be funded with cash plus a $4.5 billion term loan) is expected to close in Q3 with modest 2026 P&L impact and to be accretive to non‑GAAP operating income in 2029, and said they will update 2026 guidance at close. Quarterly metrics highlighted alongside guidance included Q2 revenue of $3.3 billion (+12% YoY, with ~170 bps FX benefit), Q2 gross margin of 85.6%, Q2 non‑GAAP EPS of $4.73 (+5% YoY), Q2 non‑GAAP R&D of $889 million and SG&A of $520 million, cash and investments of ~$13.6 billion, and Q2 share repurchases of ~$455 million (~1 million shares).Vertex Pharmaceuticals Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.62B | 12.07B | 11.02B | 9.87B | 8.93B | 7.57B |
| Gross Profit | 10.86B | 10.27B | 9.49B | 8.61B | 7.85B | 6.67B |
| EBITDA | 5.44B | 4.86B | 486.30M | 4.61B | 4.44B | 2.92B |
| Net Income | 4.41B | 3.95B | -535.60M | 3.62B | 3.32B | 2.34B |
Balance Sheet | ||||||
| Total Assets | 27.42B | 26.14B | 22.53B | 22.73B | 18.15B | 13.43B |
| Cash, Cash Equivalents and Short-Term Investments | 7.85B | 6.61B | 6.12B | 11.22B | 10.78B | 7.52B |
| Total Debt | 1.98B | 3.88B | 1.75B | 808.40M | 899.70M | 967.40M |
| Total Liabilities | 7.18B | 7.48B | 6.12B | 5.15B | 4.24B | 3.33B |
| Stockholders Equity | 20.25B | 18.67B | 16.41B | 17.58B | 13.91B | 10.10B |
Cash Flow | ||||||
| Free Cash Flow | 3.80B | 3.19B | -790.30M | 3.28B | 3.93B | 2.41B |
| Operating Cash Flow | 4.29B | 3.63B | -492.60M | 3.54B | 4.13B | 2.64B |
| Investing Cash Flow | -882.80M | -945.40M | -3.77B | -3.14B | -321.10M | -340.90M |
| Financing Cash Flow | -2.20B | -2.26B | -1.49B | -562.20M | -67.70M | -1.48B |
Vertex Pharmaceuticals Technical Analysis
Positive
477.36
Price Trends
482.91
Positive
460.01
Positive
457.57
Positive
Market Momentum
10.07
Negative
60.42
Neutral
55.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRTX, the sentiment is Positive. The current price of 477.36 is below the 20-day moving average (MA) of 492.40, below the 50-day MA of 482.91, and above the 200-day MA of 457.57, indicating a bullish trend. The MACD of 10.07 indicates Negative momentum. The RSI at 60.42 is Neutral, neither overbought nor oversold. The STOCH value of 55.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VRTX.
Vertex Pharmaceuticals Risk Analysis
Vertex Pharmaceuticals disclosed 50 risk factors in its most recent earnings report. Vertex Pharmaceuticals reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Vertex Pharmaceuticals Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $24.36B | 15.19 | 29.70% | ― | 26.93% | 80.66% | |
81 Outperform | $52.89B | 35.90 | 21.66% | ― | 70.57% | 30.28% | |
80 Outperform | $82.72B | 19.24 | 13.81% | 0.55% | 9.29% | 0.38% | |
75 Outperform | $128.19B | 29.77 | 23.31% | ― | 11.45% | 22.53% | |
66 Neutral | $30.60B | 36.82 | 93.61% | ― | 95.14% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $23.38B | -11.70 | -9.16% | ― | -1.05% | -395.95% |
* Healthcare Sector Average
VRTX
Vertex Pharmaceuticals
515.55
124.79
31.94%
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Vertex Pharmaceuticals Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Vertex Pharmaceuticals to Acquire Crinetics in Cash Merger
Positive
Jul 7, 2026
On July 6, 2026, Vertex Pharmaceuticals agreed to acquire Crinetics Pharmaceuticals via a cash merger in which Crinetics will become a wholly owned subsidiary, with shareholders receiving $85 per share and unvested equity awards vesting and being ...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Vertex Shareholders Endorse Board, Governance and Equity Plan
Positive
May 13, 2026
At its annual meeting held on May 13, 2026, Vertex Pharmaceuticals’ shareholders elected ten directors, including CEO Reshma Kewalramani and Executive Chairman Jeffrey Leiden, to serve on the board until the 2027 annual meeting, reinforcing ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.