VERTEX PHARMACEUTICALS INC (VRTX) Stock Fundamental Analysis
NASDAQ:VRTX - Nasdaq - US92532F1003 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to VRTX. VRTX was compared to 551 industry peers in the Biotechnology industry. While VRTX belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. VRTX is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings would make VRTX suitable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year VRTX was profitable.
In the past year VRTX has reported a negative cash flow from operations.
Of the past 5 years VRTX 4 years were profitable.
VRTX had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
VRTX has a better Return On Assets (-4.32%) than 88.02% of its industry peers.
Looking at the Return On Equity, with a value of -5.99%, VRTX belongs to the top of the industry, outperforming 89.66% of the companies in the same industry.
The Return On Invested Capital of VRTX (17.41%) is better than 97.10% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VRTX is significantly above the industry average of 14.57%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.32% | ||
| ROE | -5.99% | ||
| ROIC | 17.41% |
ROA(3y)10.62%
ROA(5y)14.47%
ROE(3y)13.73%
ROE(5y)19.12%
ROIC(3y)19.67%
ROIC(5y)20.26%
1.3 Margins
VRTX has a better Operating Margin (37.91%) than 98.91% of its industry peers.
VRTX's Operating Margin has improved in the last couple of years.
VRTX has a better Gross Margin (86.03%) than 89.29% of its industry peers.
In the last couple of years the Gross Margin of VRTX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.91% | ||
| PM (TTM) | N/A | ||
| GM | 86.03% |
OM growth 3Y2.79%
OM growth 5Y6.75%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.74%
GM growth 5Y-0.17%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), VRTX is creating some value.
VRTX has less shares outstanding than it did 1 year ago.
VRTX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, VRTX has an improved debt to assets ratio.
2.2 Solvency
VRTX has an Altman-Z score of 11.35. This indicates that VRTX is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 11.35, VRTX belongs to the top of the industry, outperforming 87.30% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that VRTX is not too dependend on debt financing.
VRTX has a Debt to Equity ratio of 0.01. This is comparable to the rest of the industry: VRTX outperforms 42.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 11.35 |
ROIC/WACC1.58
WACC11.03%
2.3 Liquidity
A Current Ratio of 2.65 indicates that VRTX has no problem at all paying its short term obligations.
VRTX's Current ratio of 2.65 is on the low side compared to the rest of the industry. VRTX is outperformed by 68.24% of its industry peers.
VRTX has a Quick Ratio of 2.29. This indicates that VRTX is financially healthy and has no problem in meeting its short term obligations.
VRTX's Quick ratio of 2.29 is on the low side compared to the rest of the industry. VRTX is outperformed by 70.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.65 | ||
| Quick Ratio | 2.29 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 7966.67% over the past year.
VRTX shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -44.14% yearly.
VRTX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.46%.
VRTX shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.50% yearly.
EPS 1Y (TTM)7966.67%
EPS 3Y-71.86%
EPS 5Y-44.14%
EPS Q2Q%135.23%
Revenue 1Y (TTM)10.46%
Revenue growth 3Y13.31%
Revenue growth 5Y21.5%
Sales Q2Q%12.06%
3.2 Future
VRTX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 152.83% yearly.
Based on estimates for the next years, VRTX will show a quite strong growth in Revenue. The Revenue will grow by 10.19% on average per year.
EPS Next Y6211.74%
EPS Next 2Y753.07%
EPS Next 3Y332.19%
EPS Next 5Y152.83%
Revenue Next Year9.53%
Revenue Next 2Y10.08%
Revenue Next 3Y9.84%
Revenue Next 5Y10.19%
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 accelerating.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.17, which indicates a rather expensive current valuation of VRTX.
Based on the Price/Earnings ratio, VRTX is valued cheaply inside the industry as 94.19% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.54, VRTX is valued at the same level.
A Price/Forward Earnings ratio of 17.80 indicates a rather expensive valuation of VRTX.
Based on the Price/Forward Earnings ratio, VRTX is valued cheaply inside the industry as 92.74% of the companies are valued more expensively.
VRTX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.28, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.17 | ||
| Fwd PE | 17.8 |
4.2 Price Multiples
VRTX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. VRTX is cheaper than 94.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 20.73 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
VRTX has a very decent profitability rating, which may justify a higher PE ratio.
VRTX's earnings are expected to grow with 332.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)0
PEG (5Y)N/A
EPS Next 2Y753.07%
EPS Next 3Y332.19%
5. Dividend
5.1 Amount
No dividends for VRTX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
375.63
-10.02 (-2.6%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryBiotechnology
Earnings (Last)
Earnings (Next)
Inst Owners97.73%
Inst Owner Change-0.65%
Ins Owners0.12%
Ins Owner Change6.76%
Market Cap96.46B
Analysts75
Price Target507.66 (35.15%)
Short Float %1.63%
Short Ratio3.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-5.13%
Min EPS beat(2)-7.2%
Max EPS beat(2)-3.07%
EPS beat(4)1
Avg EPS beat(4)-133.54%
Min EPS beat(4)-527.57%
Max EPS beat(4)3.69%
EPS beat(8)4
Avg EPS beat(8)-65%
EPS beat(12)7
Avg EPS beat(12)-42.16%
EPS beat(16)10
Avg EPS beat(16)-29.51%
Revenue beat(2)1
Avg Revenue beat(2)-1.06%
Min Revenue beat(2)-4.8%
Max Revenue beat(2)2.68%
Revenue beat(4)1
Avg Revenue beat(4)-1.23%
Min Revenue beat(4)-4.8%
Max Revenue beat(4)2.68%
Revenue beat(8)3
Avg Revenue beat(8)-0.75%
Revenue beat(12)5
Avg Revenue beat(12)-0.37%
Revenue beat(16)8
Avg Revenue beat(16)0.2%
PT rev (1m)-0.02%
PT rev (3m)0.31%
EPS NQ rev (1m)-0.4%
EPS NQ rev (3m)-1.82%
EPS NY rev (1m)-0.11%
EPS NY rev (3m)-0.84%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)-0.03%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.17 | ||
| Fwd PE | 17.8 | ||
| P/S | 8.69 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 5.85 | ||
| P/tB | 6.44 | ||
| EV/EBITDA | 20.73 |
EPS(TTM)16.94
EY4.51%
EPS(NY)21.1
Fwd EY5.62%
FCF(TTM)-4.9
FCFYN/A
OCF(TTM)-3.82
OCFYN/A
SpS43.22
BVpS64.24
TBVpS58.28
PEG (NY)0
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.32% | ||
| ROE | -5.99% | ||
| ROCE | 22.04% | ||
| ROIC | 17.41% | ||
| ROICexc | 25.78% | ||
| ROICexgc | 29.25% | ||
| OM | 37.91% | ||
| PM (TTM) | N/A | ||
| GM | 86.03% | ||
| FCFM | N/A |
ROA(3y)10.62%
ROA(5y)14.47%
ROE(3y)13.73%
ROE(5y)19.12%
ROIC(3y)19.67%
ROIC(5y)20.26%
ROICexc(3y)48.65%
ROICexc(5y)54.9%
ROICexgc(3y)69.59%
ROICexgc(5y)85.25%
ROCE(3y)24.89%
ROCE(5y)25.65%
ROICexcg growth 3Y-29.98%
ROICexcg growth 5Y-9.76%
ROICexc growth 3Y-22.64%
ROICexc growth 5Y-1.94%
OM growth 3Y2.79%
OM growth 5Y6.75%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.74%
GM growth 5Y-0.17%
F-Score4
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 0.03 | ||
| Cap/Depr | 137.41% | ||
| Cap/Sales | 2.5% | ||
| Interest Coverage | 181.38 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.65 | ||
| Quick Ratio | 2.29 | ||
| Altman-Z | 11.35 |
F-Score4
WACC11.03%
ROIC/WACC1.58
Cap/Depr(3y)171.61%
Cap/Depr(5y)187.83%
Cap/Sales(3y)3.11%
Cap/Sales(5y)3.32%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)7966.67%
EPS 3Y-71.86%
EPS 5Y-44.14%
EPS Q2Q%135.23%
EPS Next Y6211.74%
EPS Next 2Y753.07%
EPS Next 3Y332.19%
EPS Next 5Y152.83%
Revenue 1Y (TTM)10.46%
Revenue growth 3Y13.31%
Revenue growth 5Y21.5%
Sales Q2Q%12.06%
Revenue Next Year9.53%
Revenue Next 2Y10.08%
Revenue Next 3Y9.84%
Revenue Next 5Y10.19%
EBIT growth 1Y-5.42%
EBIT growth 3Y16.47%
EBIT growth 5Y29.7%
EBIT Next Year816.11%
EBIT Next 3Y130.8%
EBIT Next 5Y70.83%
FCF growth 1Y-132.34%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-124.06%
OCF growth 3YN/A
OCF growth 5YN/A