Vertex Pharmaceuticals Inc
Exchange: NASDAQSector: HealthcareIndustry: Biotechnology
Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases and conditions. The company has approved therapies for cystic fibrosis, sickle cell disease, transfusion-dependent beta thalassemia and acute pain, and it continues to advance clinical and research programs in these areas. Vertex also has a robust clinical pipeline of investigational therapies across a range of modalities in other serious diseases where it has deep insight into causal human biology, including neuropathic pain, APOL1-mediated kidney disease, IgA nephropathy, primary membranous nephropathy, autosomal dominant polycystic kidney disease, type 1 diabetes and myotonic dystrophy type 1. Vertex was founded in 1989 and has its global headquarters in Boston, with international headquarters in London. Additionally, the company has research and development sites and commercial offices in North America, Europe, Australia, Latin America and the Middle East. Vertex is consistently recognized as one of the industry's top places to work, including 15 consecutive years on Science magazine's Top Employers list and one of Fortune’s 100 Best Companies to Work For.
Did you know?
Profit margin of 32.9% — that's well above average.
Current Price
$446.78
+0.64%GoodMoat Value
$284.70
36.3% overvaluedProfile
Valuation (TTM)
Market Cap$113.36B
P/E28.67
EV$110.43B
P/B6.07
Shares Out253.72M
P/Sales9.45
Revenue$12.00B
EV/EBITDA22.32
Vertex Pharmaceuticals Inc (VRTX) Stock Analysis
GoodMoat Analysis
Vertex Pharmaceuticals is a high-quality biotechnology company with a strong, durable moat built on regulatory barriers and proprietary science, but it is currently trading at a valuation that appears significantly above its estimated intrinsic value. The business demonstrates excellent profitability and financial health, yet its growth trajectory has moderated. For a value investor, this presents a classic case of a great business at a potentially expensive price.
Read full analysis
Vertex Pharmaceuticals is a global biotechnology company focused on discovering, developing, and commercializing therapies for serious diseases, most notably cystic fibrosis (CF). Its primary competitive moat is exceptionally strong, scoring highly on regulatory barriers (criterion #5) as the sole provider of CFTR modulator therapies for most patients, protected by patents and complex regulatory approvals. It also demonstrates proprietary technology leadership (#9) in its scientific approach and benefits from high switching costs (#2) for patients on its life-sustaining treatments. Applying the GoodMoat framework, its Moat Score is likely 5+, easily passing the first gate. The company also exhibits high quality, with a robust ROE of 21.2%, a strong operating margin of 34.8%, and a healthy balance sheet with minimal debt. However, revenue growth has decelerated to 9.5% YoY, and the current P/E of 29.2x, while not extreme, must be evaluated against this growth rate. The critical valuation assessment shows a significant disconnect: the GoodMoat Target price of $284.70 implies the current price of $454.97 is approximately 60% above that estimate, which falls into the 'Unfavourable' band (<10% margin of safety) per the framework's DCF analysis. While the business passes the Moat & Quality Gate (Step 1), it likely fails the Valuation & Risk Gate (Step 2). The combination of full valuation and moderated growth suggests further investigation is warranted only with a high-conviction view on new pipeline catalysts to justify the premium. Analysis based on data as of 2024-05-15.
Market Cap$113.36B
Current Price$446.78
P/E Ratio28.67
Forward P/E—
PEG Ratio0.87
EPS$15.32
Book Value$73.57
P/B Ratio6.07
VRTX Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 13.5% FCF growth (CAGR)
Cash vs Debt
Net Cash: 3.2B
Revenue
4.2B
FY19
6.2B
FY20
7.6B
FY21
8.9B
FY22
9.9B
FY23
11.0B
FY24
12.0B
FY25
Net Income
1.2B
FY19
2.7B
FY20
2.3B
FY21
3.3B
FY22
3.6B
FY23
—
FY24
4.0B
FY25
VRTX 52-Week Range
$366.54
$509.50
50-Day MA: $465.29200-Day MA: $438.23
Did you know?
Trading 36% above its estimated fair value of $284.70.
Vertex Pharmaceuticals Inc (VRTX) Financial Summary
Vertex Pharmaceuticals Inc (VRTX) is a Healthcare company in the Biotechnology industry, listed on NASDAQ. The stock currently trades at $446.78 with a market capitalization of $113.36B.
Key valuation metrics include a P/E ratio of 28.67, price-to-book ratio of 6.07, and EPS of $15.32. The company reports a profit margin of 32.9% and return on equity of 21.2%.
VRTX Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $113.36B |
| P/E Ratio | 28.67 |
| EPS | $15.32 |
| P/B Ratio | 6.07 |
| P/S Ratio | 9.45 |
| EV/EBITDA | 22.32 |
| Profit Margin | 32.9% |
| Return on Equity | 21.2% |
| Debt/Equity | 0.10 |
VRTX Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $4.16B | $1.18B |
| FY20 | $6.21B | $2.71B |
| FY21 | $7.57B | $2.34B |
| FY22 | $8.93B | $3.32B |
| FY23 | $9.87B | $3.62B |
| FY24 | $11.02B | $-535.60M |
| FY25 | $12.00B | $3.95B |
Vertex Pharmaceuticals Inc (VRTX) Valuation
Based on GoodMoat's DCF model, Vertex Pharmaceuticals Inc has a fair value estimate of $284.70. At the current price of $446.78, the stock appears 56.9% overvalued relative to our intrinsic value estimate.
VRTX Quality Indicators
Vertex Pharmaceuticals Inc maintains a profit margin of 32.9% and an operating margin of 34.8%. Return on equity stands at 21.2%. The current ratio is 2.90. Debt-to-equity ratio is 0.10.
About Vertex Pharmaceuticals Inc
Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases and conditions. The company has approved therapies for cystic fibrosis, sickle cell disease, transfusion-dependent beta thalassemia and acute pain, and it continues to advance clinical and research programs in these areas. Vertex also has a robust clinical pipeline of investigational therapies across a range of modalities in other serious diseases where it has deep insight into causal human biology, including neuropathic pain, APOL1-mediated kidney disease, IgA nephropathy, primary membranous nephropathy, autosomal dominant polycystic kidney disease, type 1 diabetes and myotonic dystrophy type 1. Vertex was founded in 1989 and has its global headquarters in Boston, with international headquarters in London. Additionally, the company has research and development sites and commercial offices in North America, Europe, Australia, Latin America and the Middle East. Vertex is consistently recognized as one of the industry's top places to work, including 15 consecutive years on Science magazine's Top Employers list and one of Fortune’s 100 Best Companies to Work For.
VRTX Free Cash Flow
Vertex Pharmaceuticals Inc generated $3.19B in trailing twelve-month free cash flow, representing an FCF yield of 2.82%. This moderate FCF yield indicates reasonable cash generation.
VRTX Shares Outstanding
Vertex Pharmaceuticals Inc has 0.25 billion shares outstanding at a share price of $446.78, giving it a market capitalization of $113.36B.
VRTX Recent Insider Trades
Recent insider transactions at Vertex Pharmaceuticals Inc include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Liu Joy (EVP and Chief Legal Officer) | SELL | 978 | $439288.26 |
| Bozic Carmen (EVP and CMO) | SELL | 2,329 | $1.05M |
| Bozic Carmen (EVP and CMO) | SELL | 2,329 | $1.12M |