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Vertex Pharmaceuticals (VRTX)
NASDAQ:VRTX
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Vertex Pharmaceuticals
(NASDAQ:VRTX)
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Rating:74Outperform
Price Target:
$521.00
▲(6.01% Upside)
VRTX scores well on fundamentals and earnings-call outlook: strong margins, a solid balance sheet, and positive 2026 growth guidance with increasing non-CF contribution. The score is held back by volatility seen in 2024 cash flows/earnings, only moderate current technical momentum, and a premium P/E with no dividend yield provided.
Positive Factors
High Margins & Profitability
Vertex’s structurally high gross margins (~86%+) and robust 2025 operating/net margins indicate durable pricing power and low incremental cost to scale drug sales. High margins support internal funding of R&D and launches, preserving long-term cash generation and strategic flexibility.
Strong Liquidity & Capital Returns
Large cash reserves and active buybacks demonstrate financial strength and optionality: liquidity cushions launch investments, funds late‑stage trials, and supports commercialization scaling without immediate external financing, enhancing resilience over the next several quarters.
Diversifying Revenue & Pipeline Progress
Management’s guidance and multiple product launches (Genavix, KASJEVY) plus advancing renal programs shift revenue mix away from CF. A planned non‑CF contribution (> $500M) reduces single‑franchise concentration risk and supports more sustainable multi‑year growth if clinical/regulatory milestones are met.
Negative Factors
Cash Flow Volatility
Intermittent negative OCF/FCF in 2024 and variability into 2025 show earnings and cash generation sensitivity to timing, gross‑to‑net swings and launch expenses. This increases risk that large launches or trial spending could pressure liquidity or require higher financing if variability persists.
Rising Operating Spend & Higher Tax
Planned step‑up in R&D and commercial investment to fund launches and late‑stage programs will compress incremental margins and cash flow near term. A structurally higher effective tax rate in 2026 reduces net income leverage from revenue growth and diminishes free cash flow headroom.
Clinical & Regulatory Binary Risks
Multiple pivotal readouts and regulatory filings are material drivers of future non‑CF revenue. Negative or delayed outcomes, or emergent immunogenicity issues, could materially curb projected diversification, slow commercialization, and impair long‑term revenue resilience and pipeline value.
Vertex Pharmaceuticals (VRTX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$124.70B
Dividend YieldN/A
Average Volume (3M)1.56M
Price to Earnings (P/E)32.0
Beta (1Y)0.58
Revenue Growth10.53%
EPS GrowthN/A
CountryUS
Employees6,100
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)5.03
Shares Outstanding253,718,830
10 Day Avg. Volume1,697,343
30 Day Avg. Volume1,560,165
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 Cap0.96
Enterprise Value/Revenue10.24
Enterprise Value/Gross Profit11.87
Enterprise Value/Ebitda25.76
Forecast
1Y Price Target
$547.20Price Target Upside11.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering25
EPS Forecast (FY)19.55
Revenue Forecast (FY)$13.02B
Vertex Pharmaceuticals Business Overview & Revenue Model
Company DescriptionVertex 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 MoneyVertex 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 Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyVertex Pharmaceuticals Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive picture: strong top-line growth (Q4 +10%, FY +9%), strong margins and profitability (Q4 net income +24%, EPS +26%), a solid cash position, active capital returns, and multiple important commercial launches (CF next-gen, KASJEVY, Genavix) plus rapid advancement of a diversified pipeline (notably an emerging renal franchise with regulatory progress for povitacept). Near-term headwinds include a $200M Russia decline, gross-to-net effects from patient support programs impacting Genavix revenue, timing variability for cell therapy infusions, and increased operating investments and a higher expected tax rate in 2026. Key clinical/regulatory readouts (RAINIER, AMPLITUDE, other pivotal data) represent binary events that could materially affect future prospects. Overall, the positives (diversified growth, strong financials, multiple product and regulatory milestones) outweigh the near-term operational and timing challenges.Q4-2025 Updates
Positive Updates
Strong Revenue Growth
Q4 2025 total revenue of $3.2B, up 10% year-over-year; full year 2025 revenue of $12.0B, up 9% versus 2024.
Robust Profitability and Margins
Q4 2025 non-GAAP net income of $1.3B, up 24% YoY, delivering $5.30 EPS (up 26% YoY). Q4 gross margin of 85.7% and full year non-GAAP net income of $4.7B ($18.40 EPS).
Strong Balance Sheet and Capital Return
Ended 2025 with $12.3B in cash, equivalents, and marketable securities; repurchased ~4.8M shares for ~$2.0B during 2025.
Cystic Fibrosis Franchise Growth and New Therapy Data (AlifTrek/ElefTrek)
CF remains a foundation with ~77,000 patients on therapy and 7% full-year CF revenue growth. ElefTrek (AlifTrek) Phase 3 in 2–5 year-olds showed a mean sweat chloride reduction of 9.6 mmol from TRIKAFTA baseline and 65% of patients achieved sweat chloride <30 mmol (versus 37.5% at baseline). On track for global submissions in 2–5 year-olds in H1 2026 and ongoing enrollment in 1–2 year-old study.
CF Next-Generation Pipeline Progress
NextGen 3.0 correctors advancing: VX-828 proof-of-concept on track to complete enrollment/dosing in 2026; VX-581 in Phase 1; VX-1522 (for patients without CFTR protein) Phase 1/2 readout expected H2 2026.
Emerging Renal Franchise Advancement (Povatacept / Povi)
Povatacept (dual BAFF/APRIL inhibitor) has delivered substantial proteinuria reductions and GFR stabilization through Phase 2; granted FDA Breakthrough Therapy designation, rolling review, and Priority Review Voucher use; rolling BLA submission initiated Dec 2025 and on track to complete BLA submission in H1 2026 if Phase 3 interim is supportive.
Additional Renal Program Milestones
OLYMPUS Phase 2/3 in membranous nephropathy on track to complete Phase 2 and advance to Phase 3 this summer; AMPLITUDE (enaxaplin for APOL1-mediated kidney disease) interim cohort enrolled with full-trial enrollment expected H2 2026 and interim results late 2026/early 2027; VX-407 ADPKD Phase 2 POC enrollment expected to complete in 2026.
KASJEVY Launch Momentum (Cell & Gene Therapy)
KASJEVY revenue of $54M in Q4 and $116M for full year 2025; Q4 included 111 new patient initiations, 37 first cell collections, and 30 infusions. ~90% access for Medicaid and commercial patients in the U.S.; meaningful reimbursement wins in Europe (including Italy covering ~1,500–5,000 patients depending on wording in transcript).
Genavix (Acute Pain) Successful Initial Launch
Genavix achieved >550,000 prescriptions in 2025 (~50/50 hospital vs retail), more than 35,000 prescribers, >200M lives covered by PBMs, 21 states with unrestricted Medicaid access, incorporation into >950 hospitals and >100 IDNs; company estimates ~420,000 Americans benefited as a non-opioid option in 2025.
2026 Guidance and Diversification
2026 revenue guidance $12.95B–$13.10B (8%–9% growth) with an expected contribution of $500M+ from non-CF products; combined non-GAAP operating expense guidance $5.65B–$5.75B and non-GAAP tax rate guidance 19.5%–20.5%.
Negative Updates
Regional Sales Headwind — Russia Decline
International CF revenue growth (+2% YoY) was partly offset by a previously communicated $200M decline in Russia sales for the year, weighing on international growth.
Genavix Gross-to-Net Drag from Patient Support
Gernavix/Genavix gross-to-net was significantly impacted in 2025 by an extensive patient support program, reducing near-term revenue conversion; company expects this impact to diminish over 2026 as the program sunsets.
Timing and Variability in Cell Therapy Infusions
KASJEVY infusions expected to show quarter-to-quarter variability in 2026 because patient timing dictates infusion scheduling (company expects smoothing in 2027), introducing near-term revenue timing uncertainty for the cell therapy franchise.
Rising Operating Investment and Expense
Q4 combined non-GAAP R&D, acquired IPR&D, and SG&A totaled $1.4B (up 5% YoY); full year combined non-GAAP operating expenses $5.1B and 2026 guidance calls for further investment with expenses of $5.65B–$5.75B to support launches and late-stage clinical programs.
Less Favorable Tax Dynamics Expected in 2026
Non-GAAP effective tax rate benefited from one-time tax credits in 2025 (Q4 rate 13.5%, FY 17.3%); company expects a higher tax rate of 19.5%–20.5% in 2026, reducing net income headroom versus 2025.
Clinical and Regulatory Uncertainties Remain
Key readouts remain pending (e.g., RAINIER Phase 3 interim for Povatacept, AMPLITUDE interim for enaxaplin) and outcomes will materially influence regulatory timing and approvals; while early safety signals (e.g., IgG dips with BAFF/APRIL inhibition) have shown no SAEs in RUBY-3, these are still monitored risks.
Potential Immunogenicity Risk (ADA/NAb) — Monitored but Uncertain
Anti-drug antibody (ADA) and neutralizing antibody risk is acknowledged for biologics; company reports no expected material consequence based on RUBY-3 data but recognizes the possibility as a program risk that could impact efficacy/safety if observed.
Company Guidance
Vertex guided full‑year 2026 total revenue of $12.95–$13.10 billion (8–9% growth vs. 2025), with at least $500 million expected from non‑CF products; they expect Q1 2026 revenue to be ~7% year‑over‑year with growth accelerating thereafter. Management forecast combined non‑GAAP operating expenses of $5.65–$5.75 billion and a non‑GAAP effective tax rate of 19.5–20.5%, noted Q4 2025 gross margin of 85.7% is a reasonable proxy for 2026, do not expect a material tariff impact, and plan continued commercial investment (including doubling the Genavix field force in Q2); they also expect Genavix prescriptions to more than triple versus ~550,000 in 2025 and for Genavix gross‑to‑net to ultimately settle at levels comparable to other branded medicines.Vertex Pharmaceuticals Financial Statement Overview
Summary
Strong long-term revenue growth and structurally high profitability (gross margin ~86%+), with a solid 2025 recovery (operating margin ~39%, net margin ~33%). However, 2024’s swing to losses and negative cash flow plus a 2025 step-up in debt and FCF variability reduce confidence versus steadier peers.Income Statement
Revenue has grown steadily over the last several years, with 2025 rebounding strongly after a weak 2024. Profitability is structurally high (gross margin ~86%+), and 2025 shows solid operating and net margins (~39% and ~33%). The key concern is volatility: 2024 swung to an operating loss and net loss despite revenue growth, highlighting earnings sensitivity and year-to-year noise that lowers confidence versus consistently profitable peers.78
Positive
Balance Sheet
Leverage is conservative with low debt relative to equity (roughly 0.05–0.20 across the period), and equity has grown meaningfully over time. Returns on equity are strong in most years (about 20%+ in 2020–2023 and again in 2025), supporting balance-sheet quality. The main weakness is the sharp 2025 increase in absolute debt versus prior years and the 2024 loss-driven dip in returns, though overall solvency still looks solid.84
Very Positive
Cash Flow
Cash generation is generally strong with positive operating cash flow and free cash flow in most years, and free cash flow has typically tracked net income reasonably well (around ~0.9x in 2020–2023 and 2025). However, 2024 is a clear negative outlier with both operating cash flow and free cash flow turning negative, and 2025 free cash flow declines versus the prior year. This variability tempers the score despite the otherwise strong cash profile.67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.72B | 12.07B | 11.02B | 9.87B | 8.93B | 7.57B |
| Gross Profit | 10.11B | 10.27B | 9.49B | 8.61B | 7.85B | 6.67B |
| EBITDA | 4.66B | 4.97B | 486.30M | 4.61B | 4.44B | 2.92B |
| Net Income | 3.68B | 3.95B | -535.60M | 3.62B | 3.32B | 2.34B |
Balance Sheet | ||||||
| Total Assets | 24.86B | 26.14B | 22.53B | 22.73B | 18.15B | 13.43B |
| Cash, Cash Equivalents and Short-Term Investments | 6.29B | 6.61B | 6.12B | 11.22B | 10.78B | 7.52B |
| Total Debt | 1.83B | 3.88B | 1.75B | 808.40M | 899.70M | 967.40M |
| Total Liabilities | 7.54B | 7.48B | 6.12B | 5.15B | 4.24B | 3.33B |
| Stockholders Equity | 17.32B | 18.67B | 16.41B | 17.58B | 13.91B | 10.10B |
Cash Flow | ||||||
| Free Cash Flow | 3.34B | 3.19B | -790.30M | 3.28B | 3.93B | 2.41B |
| Operating Cash Flow | 3.72B | 3.63B | -492.60M | 3.54B | 4.13B | 2.64B |
| Investing Cash Flow | -1.48B | -945.40M | -3.77B | -3.14B | -321.10M | -340.90M |
| Financing Cash Flow | -2.58B | -2.26B | -1.49B | -562.20M | -67.70M | -1.48B |
Vertex Pharmaceuticals Technical Analysis
Positive
491.47
Price Trends
460.32
Positive
438.39
Positive
435.56
Positive
Market Momentum
4.37
Negative
62.64
Neutral
48.91
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 491.47 is above the 20-day moving average (MA) of 467.59, above the 50-day MA of 460.32, and above the 200-day MA of 435.56, indicating a bullish trend. The MACD of 4.37 indicates Negative momentum. The RSI at 62.64 is Neutral, neither overbought nor oversold. The STOCH value of 48.91 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 |
|---|---|---|---|---|---|---|---|
83 Outperform | $20.12B | 15.79 | 29.87% | ― | 18.09% | 3563.21% | |
81 Outperform | $84.90B | 19.36 | 14.87% | 0.45% | 2.89% | 0.50% | |
79 Outperform | $51.95B | 38.61 | 24.75% | ― | 89.58% | ― | |
74 Outperform | $124.70B | 32.05 | 22.54% | ― | 10.53% | ― | |
55 Neutral | $41.70B | 139.29 | 73.28% | ― | 53.24% | ― | |
53 Neutral | $25.46B | -40.26 | -2.94% | ― | 7.04% | -25.24% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
VRTX
Vertex Pharmaceuticals
491.47
29.36
6.35%
ALNY
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314.40
64.40
25.76%
INCY
Incyte
101.10
29.83
41.85%
REGN
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803.17
126.92
18.77%
ARGX
Argenx Se
821.96
182.96
28.63%
BNTX
BioNTech SE
105.87
-16.88
-13.75%
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.