Update shared on 19 Nov 2025
Fair value Decreased 24%Vertex's analyst price target has been lowered significantly, falling from over $36 to under $28 per share. Analysts cite softened revenue growth, reduced margin outlooks, and ongoing business challenges following disappointing quarterly results and guidance updates.
Analyst Commentary
Analyst sentiment following Vertex's recent earnings and guidance updates is mixed, with both optimism for the company's long-term positioning and caution regarding its near-term challenges and execution risks. The following summarizes the key perspectives from the latest Street research:
Bullish Takeaways
- Bullish analysts believe Vertex retains a competitive moat within the enterprise indirect tax market. They cite strong market position as a potential driver for long-term recovery.
- Some see multiple levers, such as product enhancement and potential acceleration of growth, that could enable a return to high-teens growth rates once current challenges are addressed.
- Recent commentary points to management expressing confidence in the company's 2026 outlook. Shares trading at historically low valuation multiples may present opportunity as stability returns.
Bearish Takeaways
- Bearish analysts remain cautious about Vertex's near-term revenue growth. Guidance and recent results indicate ongoing headwinds and reduced forward momentum.
- Margin outlooks have softened, with execution risks heightened due to business challenges and one-off events that have impacted forecasts for fiscal year 2025.
- Concerns remain around customer churn and the impact of legacy deployment changes, leading to persistent pressure on net revenue retention.
- The CEO transition is viewed as a source of uncertainty. Some caution that investor confidence may remain subdued until leadership changes are fully digested and business performance stabilizes.
What's in the News
- Jefferies analyst lowered Vertex's price target to $28 from $35 per share, citing ongoing net revenue retention challenges, legacy deployment deprecations, and CEO transition uncertainty (Jefferies, Periodical).
- Vertex, Inc. announced a share repurchase program, authorizing up to $150 million in Class A common stock buybacks with no set expiration date (Key Developments).
- The company provided earnings guidance for fourth quarter and full year 2025, projecting revenues of $192 to $196 million for Q4 and $745.7 to $749.7 million for the year (Key Developments).
- Vertex announced CEO David DeStefano will retire as of November 10, 2025. Christopher Young, former Executive Vice President at Microsoft and ex-CEO of McAfee, will assume the CEO role and join the Board of Directors (Key Developments).
- Vertex achieved Oracle Validated Integration with its Accelerator for Oracle's ERP, marking scalability and performance milestones and processing over one billion transactions on Oracle Cloud Infrastructure in the first seven months (Key Developments).
Valuation Changes
- Consensus Analyst Fair Value: Lowered significantly, from approximately $36.79 to $27.86 per share.
- Discount Rate: Increased slightly from 8.71% to 8.72%.
- Revenue Growth: Reduced from 14.62% to 11.52% annually, reflecting a softer growth outlook.
- Net Profit Margin: Declined sharply from 6.69% to 1.14%.
- Future P/E Ratio: Increased significantly from 112.2x to 503.9x, signaling lower expected profitability.
Disclaimer
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