Vertex Pharmaceuticals (VRTX) AI Stock Analysis

• Market Cap: $111.36B
• Dividend Yield: N/A
• Average Volume (3M): 1.23M
• Price to Earnings (P/E): 31.1
• Beta (1Y): 0.59
• Revenue Growth: 10.53%
• EPS Growth: N/A
• Country: US
• Employees: 6,100
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 4.80
• Shares Outstanding: 253,718,830
• 10 Day Avg. Volume: 1,336,679
• 30 Day Avg. Volume: 1,234,864
• PEG Ratio: 1.69
• Price to Book (P/B): 6.32
• Price to Sales (P/S): 9.41
• P/FCF Ratio: -131.21
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 8.23
• Enterprise Value/Gross Profit: 9.53
• Enterprise Value/Ebitda: 20.69
• 1Y Price Target: $519.69
• Price Target Upside: 18.40% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): 19.82
• Revenue Forecast (FY): $13.01B

• Rating: 78 Outperform
• Price Target: $529.00 ▲(20.52% Upside)

Vertex Pharmaceuticals receives a strong overall score driven by its robust financial performance and positive earnings call sentiment. The company's strategic focus on expanding its cystic fibrosis portfolio and pipeline advancements supports future growth. However, the high valuation and some operational challenges temper the outlook slightly.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective product portfolio management, supporting long-term financial stability.

Pipeline Progress

A robust pipeline with advanced-stage programs enhances future growth prospects and diversifies revenue sources, reducing reliance on existing products.

Balance Sheet Health

A strong balance sheet with low leverage provides financial flexibility and resilience against economic fluctuations, supporting long-term operational stability.

Negative Factors

Free Cash Flow Decline

Declining free cash flow growth may limit investment capacity and impact the company's ability to fund new projects or return capital to shareholders.

Regulatory Delays

Regulatory delays can hinder product rollout and revenue realization, impacting growth timelines and investor confidence in strategic initiatives.

Earnings Volatility

Earnings volatility can affect investor confidence and complicate financial planning, posing risks to consistent performance and valuation stability.

Vertex Pharmaceuticals Business Overview & Revenue Model

Company Description

Vertex Pharmaceuticals Incorporated, a biotechnology company, engages in developing and commercializing therapies for treating cystic fibrosis. The company markets SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO to treat patients with cystic fibrosis who have specific mutations in their cystic fibrosis transmembrane conductance regulator gene; and TRIKAFTA for the treatment of patients with CF 6 years of age or older who have at least one F508del mutation. Its pipeline includes VX-864 for the treatment of AAT deficiency, which is in Phase 2 clinical trial; VX-147 for the treatment of APOL1-mediated focal segmental glomerulosclerosis, or FSGS, and other serious kidney diseases which is in Phase 2 clinical trial; VX- 880, treatment for Type 1 Diabetes which is in Phase 1/2 clinical trial; VX-548, a NaV1.8 inhibitor for treatments of acute, neuropathic, musculoskeletal pain which is in Phase 2 clinical trial; and CTX001 for the treatment severe SCD and TDT which is in Phase 3 clinical trial. The company sells its products primarily to specialty pharmacy and specialty distributors in the United States, as well as specialty distributors and retail chains, and hospitals and clinics internationally. It has collaborations with Affinia Therapeutics, Inc.; Arbor Biotechnologies, Inc.; CRISPR Therapeutics AG.; Kymera Therapeutics, Inc.; Mammoth Biosciences, Inc.; Moderna, Inc.; Obsidian Therapeutics, Inc.; and Skyhawk Therapeutics, Inc.; as well as Ribometrix, Inc.; Genomics plc; Merck KGaA; Darmstadt, Germany, and X-Chem, Inc. Vertex Pharmaceuticals Incorporated was founded in 1989 and is headquartered in Boston, Massachusetts.

How the Company Makes Money

Vertex Pharmaceuticals generates revenue primarily through the sale of its CF therapies, which have been approved by regulatory agencies and are widely adopted in various markets. The company’s revenue model is heavily reliant on prescription sales, with significant contributions from its flagship drugs like Trikafta, which has become a cornerstone of its revenue due to its high efficacy and adoption rates. Additionally, Vertex engages in collaborations and partnerships with other pharmaceutical companies and research institutions, which can provide funding and share in the development costs of new drugs. These partnerships may also lead to milestone payments and royalties on future sales, further enhancing the company's earnings potential. Overall, the combination of direct sales from its approved therapies and strategic partnerships plays a critical role in Vertex's financial performance.

Vertex Pharmaceuticals Financial Statement Overview

Summary

Vertex Pharmaceuticals demonstrates strong financial health with high profitability and a solid balance sheet. The company shows efficient operations and effective equity utilization. While cash flow remains positive, the recent decline in free cash flow growth and past volatility in earnings warrant attention. Overall, Vertex is well-positioned in the biotechnology industry with a stable financial foundation.

Income Statement

Vertex Pharmaceuticals shows strong profitability with a high gross profit margin of 86.1% and a solid net profit margin of 31.9% in the TTM period. Revenue growth is modest at 2.67% for the TTM, indicating stability. The EBIT and EBITDA margins are robust at 38.5% and 40.9%, respectively, reflecting efficient operations. However, the previous year's negative EBIT and net income highlight potential volatility.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.089, indicating low leverage. Return on equity is healthy at 22.1%, showcasing effective use of equity to generate profits. The equity ratio stands at 100%, suggesting a solid capital structure. However, the slight increase in debt over the past year could be monitored.

Cash Flow

Operating cash flow is strong, covering 92.9% of net income, and free cash flow remains positive despite a slight decline. The free cash flow to net income ratio is high at 90.9%, indicating efficient cash generation. However, the negative growth in free cash flow over the TTM period suggests potential challenges in cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.72B	11.02B	9.87B	8.93B	7.57B	6.21B
Gross Profit	10.11B	9.49B	8.61B	7.85B	6.67B	5.47B
EBITDA	4.66B	486.30M	4.61B	4.44B	2.92B	3.28B
Net Income	3.68B	-535.60M	3.62B	3.32B	2.34B	2.71B
Balance Sheet
Total Assets	24.86B	22.53B	22.73B	18.15B	13.43B	11.75B
Cash, Cash Equivalents and Short-Term Investments	6.29B	6.12B	11.22B	10.78B	7.52B	6.66B
Total Debt	1.83B	1.75B	808.40M	899.70M	967.40M	931.90M
Total Liabilities	7.54B	6.12B	5.15B	4.24B	3.33B	3.06B
Stockholders Equity	17.32B	16.41B	17.58B	13.91B	10.10B	8.69B
Cash Flow
Free Cash Flow	3.34B	-790.30M	3.28B	3.93B	2.41B	2.99B
Operating Cash Flow	3.72B	-492.60M	3.54B	4.13B	2.64B	3.25B
Investing Cash Flow	-1.48B	-3.77B	-3.14B	-321.10M	-340.90M	99.39M
Financing Cash Flow	-2.58B	-1.49B	-562.20M	-67.70M	-1.48B	-505.28M

Vertex Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 438.92
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRTX, the sentiment is Neutral. The current price of 438.92 is below the 20-day moving average (MA) of 457.40, below the 50-day MA of 444.46, and above the 200-day MA of 437.26, indicating a neutral trend. The MACD of 1.03 indicates Positive momentum. The RSI at 43.18 is Neutral, neither overbought nor oversold. The STOCH value of 9.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VRTX.

Vertex Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
REGN	82 Outperform	$77.98B	17.76	15.19%	0.45%	2.89%	0.50%
INCY	81 Outperform	$20.66B	17.82	30.39%	―	18.09%	3563.21%
ARGX	79 Outperform	$50.06B	37.58	24.75%	―	89.58%	―
VRTX	78 Outperform	$111.36B	31.11	22.31%	―	10.53%	―
ALNY	60 Neutral	$47.46B	1,494.47	32.73%	―	53.24%	―
BNTX	53 Neutral	$25.51B	-41.43	-2.94%	―	7.04%	-25.24%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%