VERTEX INC - CLASS A (VERX) Stock Fundamental Analysis
NASDAQ:VERX - Nasdaq - US92538J1060 - Common Stock - Currency: USD
Taking everything into account, VERX scores 3 out of 10 in our fundamental rating. VERX was compared to 281 industry peers in the Software industry. VERX may be in some trouble as it scores bad on both profitability and health. VERX shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year VERX was profitable.
In the past year VERX had a positive cash flow from operations.
In the past 5 years VERX always reported negative net income.
Each year in the past 5 years VERX had a positive operating cash flow.
1.2 Ratios
VERX has a Return On Assets (-3.84%) which is in line with its industry peers.
With a Return On Equity value of -22.09%, VERX perfoms like the industry average, outperforming 41.64% of the companies in the same industry.
VERX has a better Return On Invested Capital (0.53%) than 63.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.84% | ||
| ROE | -22.09% | ||
| ROIC | 0.53% |
ROA(3y)-2.65%
ROA(5y)-4.32%
ROE(3y)-13.31%
ROE(5y)-14.67%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Operating Margin, with a value of 0.62%, VERX is in the better half of the industry, outperforming 62.63% of the companies in the same industry.
VERX's Gross Margin of 64.53% is in line compared to the rest of the industry. VERX outperforms 44.48% of its industry peers.
VERX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.62% | ||
| PM (TTM) | N/A | ||
| GM | 64.53% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.03%
GM growth 5Y-0.54%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VERX is destroying value.
The number of shares outstanding for VERX has been increased compared to 1 year ago.
Compared to 5 years ago, VERX has more shares outstanding
Compared to 1 year ago, VERX has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.93 indicates that VERX is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.93, VERX is in the better half of the industry, outperforming 64.06% of the companies in the same industry.
VERX has a Debt/Equity ratio of 1.67. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.67, VERX is not doing good in the industry: 79.72% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.67 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.93 |
ROIC/WACC0.05
WACC11.36%
2.3 Liquidity
A Current Ratio of 0.98 indicates that VERX may have some problems paying its short term obligations.
VERX has a Current ratio of 0.98. This is in the lower half of the industry: VERX underperforms 75.80% of its industry peers.
VERX has a Quick Ratio of 0.98. This is a bad value and indicates that VERX is not financially healthy enough and could expect problems in meeting its short term obligations.
VERX has a worse Quick ratio (0.98) than 74.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.98 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
VERX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 32.61%, which is quite impressive.
VERX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.31% yearly.
The Revenue has grown by 15.20% in the past year. This is quite good.
Measured over the past years, VERX shows a quite strong growth in Revenue. The Revenue has been growing by 15.71% on average per year.
EPS 1Y (TTM)32.61%
EPS 3Y25.31%
EPS 5YN/A
EPS Q2Q%0%
Revenue 1Y (TTM)15.2%
Revenue growth 3Y16.15%
Revenue growth 5Y15.71%
Sales Q2Q%12.94%
3.2 Future
Based on estimates for the next years, VERX will show a very strong growth in Earnings Per Share. The EPS will grow by 23.03% on average per year.
Based on estimates for the next years, VERX will show a quite strong growth in Revenue. The Revenue will grow by 15.87% on average per year.
EPS Next Y5.87%
EPS Next 2Y14.97%
EPS Next 3Y24.47%
EPS Next 5Y23.03%
Revenue Next Year14.76%
Revenue Next 2Y14.66%
Revenue Next 3Y15.59%
Revenue Next 5Y15.87%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 54.38, the valuation of VERX can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of VERX is on the same level as its industry peers.
When comparing the Price/Earnings ratio of VERX to the average of the S&P500 Index (27.25), we can say VERX is valued expensively.
A Price/Forward Earnings ratio of 41.14 indicates a quite expensive valuation of VERX.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VERX is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.80, VERX is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.38 | ||
| Fwd PE | 41.14 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VERX is valued a bit cheaper than 62.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 61.66 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VERX does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as VERX's earnings are expected to grow with 24.47% in the coming years.
PEG (NY)9.26
PEG (5Y)N/A
EPS Next 2Y14.97%
EPS Next 3Y24.47%
5. Dividend
5.1 Amount
VERX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
33.17
-0.78 (-2.3%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners109.63%
Inst Owner Change0.05%
Ins Owners6.35%
Ins Owner Change28.4%
Market Cap5.26B
Analysts79.09
Price Target48.22 (45.37%)
Short Float %10.96%
Short Ratio5.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.16%
Min EPS beat(2)7.01%
Max EPS beat(2)9.3%
EPS beat(4)4
Avg EPS beat(4)11.4%
Min EPS beat(4)7.01%
Max EPS beat(4)15.34%
EPS beat(8)7
Avg EPS beat(8)9.6%
EPS beat(12)11
Avg EPS beat(12)12.37%
EPS beat(16)15
Avg EPS beat(16)21.26%
Revenue beat(2)0
Avg Revenue beat(2)-1.5%
Min Revenue beat(2)-1.91%
Max Revenue beat(2)-1.09%
Revenue beat(4)1
Avg Revenue beat(4)-0.97%
Min Revenue beat(4)-1.91%
Max Revenue beat(4)0.84%
Revenue beat(8)3
Avg Revenue beat(8)-0.04%
Revenue beat(12)6
Avg Revenue beat(12)0.1%
Revenue beat(16)9
Avg Revenue beat(16)0.49%
PT rev (1m)0.52%
PT rev (3m)0.87%
EPS NQ rev (1m)0.6%
EPS NQ rev (3m)-2.79%
EPS NY rev (1m)0%
EPS NY rev (3m)0.19%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.38 | ||
| Fwd PE | 41.14 | ||
| P/S | 7.65 | ||
| P/FCF | N/A | ||
| P/OCF | 33.9 | ||
| P/B | 26.22 | ||
| P/tB | N/A | ||
| EV/EBITDA | 61.66 |
EPS(TTM)0.61
EY1.84%
EPS(NY)0.81
Fwd EY2.43%
FCF(TTM)-0.07
FCFYN/A
OCF(TTM)0.98
OCFY2.95%
SpS4.34
BVpS1.27
TBVpS-1.33
PEG (NY)9.26
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.84% | ||
| ROE | -22.09% | ||
| ROCE | 0.67% | ||
| ROIC | 0.53% | ||
| ROICexc | 0.91% | ||
| ROICexgc | N/A | ||
| OM | 0.62% | ||
| PM (TTM) | N/A | ||
| GM | 64.53% | ||
| FCFM | N/A |
ROA(3y)-2.65%
ROA(5y)-4.32%
ROE(3y)-13.31%
ROE(5y)-14.67%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.03%
GM growth 5Y-0.54%
F-Score4
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.67 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.8 | ||
| Cap/Depr | 197.33% | ||
| Cap/Sales | 24.14% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 175.54% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.98 | ||
| Quick Ratio | 0.98 | ||
| Altman-Z | 3.93 |
F-Score4
WACC11.36%
ROIC/WACC0.05
Cap/Depr(3y)135.67%
Cap/Depr(5y)121.89%
Cap/Sales(3y)16.89%
Cap/Sales(5y)14.01%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)32.61%
EPS 3Y25.31%
EPS 5YN/A
EPS Q2Q%0%
EPS Next Y5.87%
EPS Next 2Y14.97%
EPS Next 3Y24.47%
EPS Next 5Y23.03%
Revenue 1Y (TTM)15.2%
Revenue growth 3Y16.15%
Revenue growth 5Y15.71%
Sales Q2Q%12.94%
Revenue Next Year14.76%
Revenue Next 2Y14.66%
Revenue Next 3Y15.59%
Revenue Next 5Y15.87%
EBIT growth 1Y142.14%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year27.81%
EBIT Next 3Y28.57%
EBIT Next 5Y28.3%
FCF growth 1Y-252.96%
FCF growth 3Y-49.75%
FCF growth 5Y-35.88%
OCF growth 1Y91.41%
OCF growth 3Y21.47%
OCF growth 5Y12.25%