NasdaqGS:VRTX

Stock Analysis Report

Executive Summary

Vertex Pharmaceuticals Incorporated engages in developing and commercializing therapies for treating cystic fibrosis.

Rewards

Trading at 18.4% below its fair value

Earnings are forecast to grow 28.13% per year

Earnings grew by 231.4% over the past year

Risk Analysis

No risks detected for VRTX from our risk checks.


Snowflake Analysis

Outstanding track record with flawless balance sheet.


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: VRTX has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.7%

VRTX

-1.9%

US Biotechs

-0.09%

US Market


1 Year Return

25.4%

VRTX

11.2%

US Biotechs

23.9%

US Market

Return vs Industry: VRTX exceeded the US Biotechs industry which returned 10.9% over the past year.

Return vs Market: VRTX underperformed the US Market which returned 24.4% over the past year.


Shareholder returns

VRTXIndustryMarket
7 Day-0.7%-1.9%-0.09%
30 Day6.1%-2.6%3.1%
90 Day20.3%14.9%10.4%
1 Year25.4%25.4%12.2%11.2%26.6%23.9%
3 Year174.1%174.1%26.5%22.4%50.9%41.2%
5 Year104.9%104.9%2.5%-2.3%78.1%58.5%

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

Valuation

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

11.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VRTX ($229.75) is trading below our estimate of fair value ($281.52)

Significantly Below Fair Value: VRTX is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: VRTX is poor value based on its PE Ratio (27.4x) compared to the Biotechs industry average (20.1x).

PE vs Market: VRTX is poor value based on its PE Ratio (27.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: VRTX is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: VRTX is overvalued based on its PB Ratio (11.3x) compared to the US Biotechs industry average (3.2x).


Next Steps

Future Growth

How is Vertex Pharmaceuticals forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

28.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VRTX's forecast earnings growth (28.1% per year) is above the savings rate (1.7%).

Earnings vs Market: VRTX's earnings (28.1% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: VRTX's revenue (17.5% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: VRTX's revenue (17.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VRTX's Return on Equity is forecast to be high in 3 years time (29.2%)


Next Steps

Past Performance

How has Vertex Pharmaceuticals performed over the past 5 years?

79.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VRTX has high quality earnings.

Growing Profit Margin: VRTX's current net profit margins (59.2%) are higher than last year (22.9%).


Past Earnings Growth Analysis

Earnings Trend: VRTX has become profitable over the past 5 years, growing earnings by 79.2% per year.

Accelerating Growth: VRTX's earnings growth over the past year (231.4%) exceeds its 5-year average (79.2% per year).

Earnings vs Industry: VRTX earnings growth over the past year (231.4%) exceeded the Biotechs industry 103.3%.


Return on Equity

High ROE: VRTX's Return on Equity (40.3%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Vertex Pharmaceuticals's financial position?


Financial Position Analysis

Short Term Liabilities: VRTX's short term assets ($4.8B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: VRTX's short term assets ($4.8B) exceed its long term liabilities ($872.3M).


Debt to Equity History and Analysis

Debt Level: VRTX is debt free.

Reducing Debt: VRTX has no debt compared to 5 years ago when its debt to equity ratio was 25.5%.

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

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


Balance Sheet

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

Debt Coverage by Assets: VRTX's debt is covered by short term assets (assets are 4.201976319983E+16x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years0%

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate VRTX'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 VRTX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VRTX'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 VRTX's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Vertex Pharmaceuticals's salary, the management and board of directors tenure and is there insider trading?

3.0yrs

Average management tenure


CEO

Jeff Leiden (63yo)

7.9yrs

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 ($USD18.80M) is above average for companies of similar size in the US market ($USD10.76M).

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


Management Age and Tenure

3.0yrs

Average Tenure

51yo

Average Age

Experienced Management: VRTX's management team is considered experienced (3 years average tenure).


Board Age and Tenure

6.5yrs

Average Tenure

60yo

Average Age

Experienced Board: VRTX's board of directors are considered experienced (6.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$641,21806 Feb 19
Paul Silva
EntityIndividual
Shares3,438
Max PriceUS$188.33

Ownership Breakdown

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


Management Team

  • Jeff Leiden (63yo)

    Chairman

    • Tenure: 7.9yrs
    • Compensation: US$18.80m
  • Charlie Wagner (51yo)

    Executive VP & CFO

    • Tenure: 0.8yrs
  • Michael Partridge

    Senior Vice President of Investor Relations

    • Amit Sachdev (51yo)

      Executive VP & Chief Patient Officer

      • Tenure: 12.5yrs
      • Compensation: US$5.68m
    • David Altshuler (54yo)

      Executive VP of Global Research & Chief Scientific Officer

      • Tenure: 5yrs
      • Compensation: US$5.73m
    • Damian Wilmot (43yo)

      Senior VP

      • Tenure: 3yrs
    • Stuart Arbuckle (53yo)

      Executive VP & Chief Commercial Officer

      • Tenure: 7.3yrs
      • Compensation: US$5.35m
    • Michael Parini (44yo)

      Executive VP and Chief Legal & Administrative Officer

      • Tenure: 3yrs
      • Compensation: US$5.37m
    • Nina Devlin

      Senior VP & Chief Communications Officer

      • Tenure: 1yrs
    • Mike Tirozzi

      SVP and Chief Information & Data Officer

      • Tenure: 1yrs

    Board Members

    • Bruce Sachs (59yo)

      Lead Independent Director

      • Compensation: US$655.32k
    • Bill Young (74yo)

      Independent Director

      • Tenure: 5.7yrs
      • Compensation: US$597.82k
    • Jeff Leiden (63yo)

      Chairman

      • Tenure: 7.9yrs
      • Compensation: US$18.80m
    • Yuchun Lee (54yo)

      Independent Director

      • Tenure: 7.3yrs
      • Compensation: US$600.32k
    • Margie McGlynn (60yo)

      Independent Director

      • Tenure: 8.7yrs
      • Compensation: US$595.32k
    • Terry Kearney (64yo)

      Independent Director

      • Tenure: 8.7yrs
      • Compensation: US$617.82k
    • Alan Garber (63yo)

      Independent Director

      • Tenure: 2.6yrs
      • Compensation: US$585.32k
    • Lloyd Carney (57yo)

      Independent Director

      • Tenure: 0.9yrs
    • Sangeeta Bhatia (50yo)

      Independent Director

      • Tenure: 4.6yrs
      • Compensation: US$605.32k

    Company Information

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


    Key Information

    • Name: Vertex Pharmaceuticals Incorporated
    • Ticker: VRTX
    • Exchange: NasdaqGS
    • Founded: 1989
    • Industry: Biotechnology
    • Sector: Pharmaceuticals & Biotech
    • Market Cap: US$60.150b
    • Shares outstanding: 257.15m
    • 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 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. It is also developing VX-659 and VX-445 that are Phase III clinical trials; VX-121, a cystic fibrosis transmembrane conductance regulator corrector that is in Phase I/II clinical trial; VX-150, an inhibitor that is in Phase IIb clinical trial for acute pain; CTX001 that is in Phase I/II clinical trial for the treatment of beta-thalassemia and sickle cell diseases; and a novel drug candidate, which is in Phase I clinical trial for the treatment for alpha-1 antitrypsin deficiency. 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; Arbor Biotechnologies, Inc.; Moderna Therapeutics, Inc.; Genomics plc; Merck KGaA; Darmstadt, Germany; X-Chem, Inc.; Janssen Pharmaceuticals, Inc.; Merck KGaA; Kymera Therapeutics; 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 Analysis2020/01/23 23:58
    End of Day Share Price2020/01/23 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.