DB:VX1

Stock Analysis Report

Executive Summary

Vertex Pharmaceuticals Incorporated engages in developing and commercializing therapies for the treatment of cystic fibrosis.

Rewards

Trading at 27.2% below its fair value

Earnings are forecast to grow 23.62% per year

Risk Analysis

Profit margins (28.3%) are lower than last year (68.8%)



Snowflake Analysis

Flawless balance sheet with high growth potential.


Similar Companies

Share Price & News

How has Vertex Pharmaceuticals's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VX1 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.6%

VX1

-1.8%

DE Biotechs

0.1%

DE Market


1 Year Return

34.9%

VX1

7.2%

DE Biotechs

14.1%

DE Market

Return vs Industry: VX1 exceeded the German Biotechs industry which returned 7.2% over the past year.

Return vs Market: VX1 exceeded the German Market which returned 14.1% over the past year.


Shareholder returns

VX1IndustryMarket
7 Day-0.6%-1.8%0.1%
30 Day6.4%-2.9%0.2%
90 Day14.5%5.8%3.3%
1 Year34.9%34.9%7.5%7.2%17.6%14.1%
3 Year172.6%172.6%42.8%41.2%14.8%4.8%
5 Year117.4%117.4%11.6%9.3%22.2%5.4%

Price Volatility Vs. Market

How volatile is Vertex Pharmaceuticals's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Vertex Pharmaceuticals undervalued compared to its fair value and its price relative to the market?

27.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VX1 (€223.5) is trading below our estimate of fair value (€307.03)

Significantly Below Fair Value: VX1 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VX1 is poor value based on its PE Ratio (53.7x) compared to the Biotechs industry average (43.8x).

PE vs Market: VX1 is poor value based on its PE Ratio (53.7x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: VX1 is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: VX1 is overvalued based on its PB Ratio (10.5x) compared to the DE Biotechs industry average (3.5x).


Next Steps

Future Growth

How is Vertex Pharmaceuticals forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

23.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VX1's forecast earnings growth (23.6% per year) is above the savings rate (-0.4%).

Earnings vs Market: VX1's earnings (23.6% per year) are forecast to grow faster than the German market (13.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: VX1's revenue (15.3% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: VX1's revenue (15.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VX1's Return on Equity is forecast to be high in 3 years time (22.5%)


Next Steps

Past Performance

How has Vertex Pharmaceuticals performed over the past 5 years?

76.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VX1 has high quality earnings.

Growing Profit Margin: VX1's current net profit margins (28.3%) are lower than last year (68.8%).


Past Earnings Growth Analysis

Earnings Trend: VX1 has become profitable over the past 5 years, growing earnings by 76% per year.

Accelerating Growth: VX1's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VX1 had negative earnings growth (-43.9%) over the past year, making it difficult to compare to the Biotechs industry average (-4.7%).


Return on Equity

High ROE: VX1's Return on Equity (19.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Vertex Pharmaceuticals's financial position?


Financial Position Analysis

Short Term Liabilities: VX1's short term assets ($4.8B) exceed its short term liabilities ($1.3B).

Long Term Liabilities: VX1's short term assets ($4.8B) exceed its long term liabilities ($898.4M).


Debt to Equity History and Analysis

Debt Level: VX1 is debt free.

Reducing Debt: VX1 has no debt compared to 5 years ago when its debt to equity ratio was 26.9%.

Debt Coverage: VX1 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: VX1 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: VX1 has a low level of unsold assets or inventory.

Debt Coverage by Assets: VX1's debt is not covered by short term assets (assets are -4.2422052514201E+16x debt).


Next Steps

Dividend

What is Vertex Pharmaceuticals's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.3%markettop25%3.6%industryaverage1.0%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate VX1's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate VX1's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if VX1's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VX1's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VX1's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Jeff Leiden (63yo)

8yrs

Tenure

US$18,799,147

Compensation

Dr. Jeffrey Marc Leiden, also known as Jeff, M.D., Ph.D. has been the Chairman of Vertex Pharmaceuticals Incorporated since May 2012 and has been its Chief Executive Officer and has also been President sin ...


CEO Compensation Analysis

Compensation vs Market: Jeff's total compensation ($USD18.80M) is above average for companies of similar size in the German market ($USD4.36M).

Compensation vs Earnings: Jeff's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jeffrey Leiden
Chairman8yrsUS$18.80m0.051% $30.0m
Michael Parini
Executive VP and Chief Legal & Administrative Officer3.1yrsUS$5.37m0.015% $8.5m
Amit Sachdev
Executive VP & Chief Patient Officer12.6yrsUS$5.68m0.024% $14.3m
Stuart Arbuckle
Executive VP & Chief Commercial Officer7.4yrsUS$5.35m0.018% $10.7m
Charles Wagner
Executive VP & CFO0.8yrsno datano data
David Altshuler
Executive VP of Global Research & Chief Scientific Officer5.1yrsUS$5.73m0.015% $9.0m
Mike Tirozzi
SVP and Chief Information & Data Officer1.1yrsno datano data
Michael Partridge
Senior Vice President of Investor Relations0yrsno datano data
Damian Wilmot
Senior VP3.1yrsno datano data
Nina Devlin
Senior VP & Chief Communications Officer1.1yrsno datano data

3.1yrs

Average Tenure

51yo

Average Age

Experienced Management: VX1's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jeffrey Leiden
Chairman8yrsUS$18.80m0.051% $30.0m
Reshma Kewalramani
Executive VP0yrsno datano data
Bruce Sachs
Lead Independent Director0yrsUS$655.32k0.0043% $2.5m
William Young
Independent Director5.8yrsUS$597.82k0.0027% $1.6m
Yuchun Lee
Independent Director7.4yrsUS$600.32k0.00072% $420.7k
Margaret McGlynn
Independent Director8.8yrsUS$595.32k0.0015% $876.5k
Terrence Kearney
Independent Director8.8yrsUS$617.82k0.0013% $771.4k
Alan Garber
Independent Director2.7yrsUS$585.32k0.0015% $899.9k
Lloyd Carney
Independent Director1yrsno datano data
Sangeeta Bhatia
Independent Director4.7yrsUS$605.32k0.0011% $648.6k

6.6yrs

Average Tenure

59.5yo

Average Age

Experienced Board: VX1's board of directors are considered experienced (6.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: VX1 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Vertex Pharmaceuticals Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Vertex Pharmaceuticals Incorporated
  • Ticker: VX1
  • Exchange: DB
  • Founded: 1989
  • Industry: Biotechnology
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: US$63.215b
  • Listing Market Cap: US$58.436b
  • Shares outstanding: 259.27m
  • Website: https://www.vrtx.com

Number of Employees


Location

  • Vertex Pharmaceuticals Incorporated
  • 50 Northern Avenue
  • Boston
  • Massachusetts
  • 2210
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VRTXNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJul 1991
VX1XTRA (XETRA Trading Platform)YesCommon SharesDEEURJul 1991
VX1DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 1991
VRTX *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNJul 1991
VRTXSWX (SIX Swiss Exchange)YesCommon SharesCHCHFJul 1991
0QZULSE (London Stock Exchange)YesCommon SharesGBUSDJul 1991
VRTXWBAG (Wiener Boerse AG)YesCommon SharesATEURJul 1991
VX1ETLX (Eurotlx)YesCommon SharesITEURJul 1991
VRTX34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REP 0.25 COM USD0.01BRBRLMay 2019

Biography

Vertex Pharmaceuticals Incorporated engages in developing and commercializing therapies for the treatment of cystic fibrosis. The company markets TRIKAFTA, SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO to treat patients with cystic fibrosis who have specific mutations in their cystic fibrosis transmembrane conductance regulator gene. It is also developing VX-814, which is in Phase 2 clinical trial and VX-864 that is in Phase 1 clinical trial for the treatment of alpha-1 antitrypsin deficiency; VX-147 for treating kidney diseases; and CTX001 that is in Phase 1/2 clinical trial for the treatment of beta-thalassemia and sickle cell diseases. In addition, the company develops VX-150, an inhibitor that is in Phase 2 clinical trial for acute, neuropathic, and musculoskeletal pain; and VX-561, a potentiator that is in Phase 2 clinical development; as well as evaluating VX-121, an additional corrector. 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. Vertex Pharmaceuticals Incorporated has collaborations with CRISPR Therapeutics AG; Kymera Therapeutics; BioAxone Biosciences, Inc.; Parion Sciences, Inc.; Merck KGaA; Janssen Pharmaceuticals, Inc.; Arbor Biotechnologies, Inc.; Moderna Therapeutics, Inc.; Genomics plc; Darmstadt, Germany; X-Chem, Inc.; Ribometrix, Inc.; and Molecular Templates, Inc. The company was founded in 1989 and is headquartered in Boston, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 22:36
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.